| Last Name, First Name |
| Portfolio Project |
| You are the accountant for Smart Construction Company, a large construction company in Colorado. You have been presented with the following |
| financial information for Smart and asked to prepare the Statement of Cash Flows for the year ended June 30, 2017. You will complete all work for |
| the project in this excel file, which includes the following tabs: |
| 1. Facts – Information taken from Smart’s accounting records and additional information regarding the cash flows as of June 30, 2017. |
| 2. Worksheet – Worksheet template (also see Example 21.3a in text). |
| 3. Cash Flows – Statement of Cash Flows template (also see Example 21.3b in text). |
|
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|
|
|
|
Account Balances |
|
|
|
|
|
|
June 30, 2016 |
June 30, 2017 |
|
Debits |
|
Cash |
|
|
|
|
$ 361,700 |
$ 880,550 |
|
Accounts Receivable |
|
|
|
|
100,000 |
125,000 |
|
Marketable Securities (at cost) |
|
|
|
|
11,700 |
13,000 |
|
Allowance for Change in Value |
|
|
|
|
1,500 |
1,800 |
|
Construction in Process |
|
|
|
|
168,750 |
405,000 |
|
Prepaid Expenses |
|
|
|
|
45,000 |
10,000 |
|
Investments (long-term) |
|
|
|
|
– 0 |
13,500 |
|
Leased Equipment |
|
|
|
|
– 0 |
20,000 |
|
Building |
|
|
|
|
30,000 |
– 0 |
|
Deferred tax asset |
|
|
|
|
5,375 |
2,200 |
|
Land |
|
|
|
|
10,500 |
10,500 |
|
Discount on Bonds Payable |
|
|
|
|
– 0 |
1,305 |
|
Totals |
|
|
|
|
734,525 |
1,482,855 |
|
|
|
|
|
|
|
|
|
|
|
|
– 0 |
|
Credits |
|
Allowance for doubtful accounts |
|
|
|
|
$ 6,000 |
$ 4,500 |
|
Accounts Payable |
|
|
|
|
87,500 |
210,000 |
|
Deferred tax liability |
|
|
|
|
1,000 |
3,300 |
|
Income Taxes Payable |
|
|
|
|
3,500 |
9,000 |
|
Note Payable (long-term) |
|
|
|
|
3,500 |
– 0 |
|
Accumulated Depreciation on Building |
|
|
|
|
2,500 |
– 0 |
|
Accumulated Depreciation on Leased Asset |
|
|
|
|
– 0 |
3,000 |
|
Lease obligation |
|
|
|
|
– 0 |
18,000 |
|
Interest payable on lease obligation |
|
|
|
|
– 0 |
1,800 |
|
Interest payable (Bonds) |
|
|
|
|
– 0 |
1,800 |
|
Bonds payable |
|
|
|
|
– 0 |
45,000 |
|
Billings on contruction in process |
|
|
|
|
150,000 |
325,000 |
|
Pension liability |
|
|
|
|
150,000 |
400,000 |
|
Convertible preferred stock, $100 par |
|
|
|
|
9,000 |
– 0 |
|
Common Stock, $10 par |
|
|
|
|
14,000 |
24,500 |
|
Additional Paid-in Capital |
|
|
|
|
8,700 |
13,700 |
|
Unrealized Increase in Value of Marketable Securities |
|
|
|
|
1,500 |
1,800 |
|
Retained Earnings |
|
|
|
|
297,325 |
421,455 |
|
Totals |
|
|
|
|
734,525 |
1,482,855 |
|
Additional information: |
|
a. Dividends declared and paid totaled $650. |
|
b. 300 shares of common stock (at par) were issued for cash. |
|
c. On July 1, 2016, convertible preferred stock that had originally been issued at par value were |
|
converted into 500 shares of common stock. The book value method was used to account for the |
|
conversion. |
|
d. The long-term note payable was paid by issuing 250 shares of common stock at the beginning of the |
|
fiscal year. |
|
e. Short-term marketable securities were purchased at a cost of $1,300. The portfolio was increased by |
|
$300 to a $14,800 fair value at year-end by adjusting the related allowance account. |
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f. During the year, a 30% interest in Ricochet Co. was purchased as an investment for $9,500. Ricochet |
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reported $20,000 in net income for the year and paid dividends of $2,000 to Smart. |
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g. $5,000 of accounts receivable were written off as uncollectible during the year. |
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h. Smart’s inventory consists of Construction-in-Process in excess of the Billings on |
|
Construction-in-Process account balance. |
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i. A building was destroyed by fire during the year and insurance proceeds of $26,000 were collected. |
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j. The 12% bonds payable were issued on February 28, 2017, at 97. They mature on February 28, 2027. |
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The company uses the straight-line method to amortize bond premiums and discounts. |
