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Question
Mr. Wizard's Magic Shoppe had the following condensed balance sheet at the end of operation for 2010:Mr. Wizard's Magic Shoppe
Balance Sheet
December 31, 2010
| Cash | $40,000 | Current Liabilities | $35,000 | |
| Other current assets | 60,000 | Long-term Notes Payable | 40,000 | |
| Total current assets | $100,000 | Bonds Payable | 50,000 | |
| Investments | $25,000 | Capital Stock | 150,000 | |
| Fixed assets (net) | 110,000 | Retained earnings | 80,000 | |
| Land | $120,000 | |||
| Total assets | $355,000 | Total Liabilities and Equity | $355,000 |
During 2011, the following occurred
a. Mr. Wizard's sold some of its investments for $13,000 which resulted in a gain of
$300 after taxes. The gain (net of taxes) has been included in the company's 2011 net income.
b. Additional land for a plant expansion was purchased for $25,000.
c. Bonds payable were paid in the amount of $10,000.
d. An additional $35,000 in capital stock was issued.
e. Dividends of $15,000 were paid to stockholders.
f. Net income for 2011 was $48,000 after allowing for $15,000 in depreciation.
g. A second parcel of land was purchased through the issuance of $10,000 in bonds,
and $5,000 in long-term notes payable.
Required:
a. Prepare a statement of cash flows for the year ended 12/31/2011.
(check figure: ending cash balance = $72,500)
b. Prepare a condensed balance sheet for Mr. Wizard's at December 31, 2011.
Answer
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