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 |
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June 30, 2016 |
June 30, 2017 |
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Debits |
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Cash |
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$ 361,700 |
$ 880,550 |
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Accounts Receivable |
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100,000 |
125,000 |
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Marketable Securities (at cost) |
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11,700 |
13,000 |
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Allowance for Change in Value |
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1,500 |
1,800 |
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Construction in Process |
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168,750 |
405,000 |
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Prepaid Expenses |
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45,000 |
10,000 |
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Investments (long-term) |
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– 0 |
13,500 |
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Leased Equipment |
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– 0 |
20,000 |
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Building |
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30,000 |
– 0 |
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Deferred tax asset |
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5,375 |
2,200 |
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Land |
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10,500 |
10,500 |
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Discount on Bonds Payable |
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– 0 |
1,305 |
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Totals |
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734,525 |
1,482,855 |
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– 0 |
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Credits |
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Allowance for doubtful accounts |
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$ 6,000 |
$ 4,500 |
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Accounts Payable |
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87,500 |
210,000 |
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Deferred tax liability |
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1,000 |
3,300 |
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Income Taxes Payable |
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3,500 |
9,000 |
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Note Payable (long-term) |
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3,500 |
– 0 |
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Accumulated Depreciation on Building |
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2,500 |
– 0 |
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Accumulated Depreciation on Leased Asset |
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– 0 |
3,000 |
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Lease obligation |
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– 0 |
18,000 |
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Interest payable on lease obligation |
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– 0 |
1,800 |
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Interest payable (Bonds) |
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– 0 |
1,800 |
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Bonds payable |
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– 0 |
45,000 |
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Billings on contruction in process |
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150,000 |
325,000 |
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Pension liability |
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150,000 |
400,000 |
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Convertible preferred stock, $100 par |
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9,000 |
– 0 |
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Common Stock, $10 par |
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14,000 |
24,500 |
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Additional Paid-in Capital |
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8,700 |
13,700 |
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Unrealized Increase in Value of Marketable Securities |
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1,500 |
1,800 |
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Retained Earnings |
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297,325 |
421,455 |
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Totals |
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734,525 |
1,482,855 |
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Additional information: |
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a. Dividends declared and paid totaled $650. |
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b. 300 shares of common stock (at par) were issued for cash. |
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c. On July 1, 2016, convertible preferred stock that had originally been issued at par value were |
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converted into 500 shares of common stock. The book value method was used to account for the |
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conversion. |
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d. The long-term note payable was paid by issuing 250 shares of common stock at the beginning of the |
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fiscal year. |
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e. Short-term marketable securities were purchased at a cost of $1,300. The portfolio was increased by |
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$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 |
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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. |