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    Hoeman, Inc: balance sheet and evaluate the change in cash

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    For the problem presented below and attached, complete the balance sheet and evaluate the change in cash.

    Presented below (See Analysis worksheet) is a partially completed balance sheet for Hoeman, Inc., at December 31, 2002,
    together with comparative data for the year ended December 31, 2001.

    Net income for the year ended December 31, 2002, was $94,000.
    Dividends paid during the year ended December 31, 2002, were $67,000.
    Accounts receivable decreased $10,000 during the year ended December 31, 2002.
    The cost of new building acquired during 2002 was $125,000.
    No buildings were disposed of during 2002.
    The land account was not affected by any transactions during the year, but the fair market value of the
    land at December 31, 2002, was $178,000.

    HOEMAN, INC.
    Comparative Balance Sheets
    At December 31, 2002, and 2001

    1999 1998
    Assets
    Cash $ 52,000 $ 46,000
    Accounts receivable 134,000
    Inventory 156,000 176,000
    Total current assets $ $ 356,000
    Land $ 140,000
    Buildings 290,000
    Less: Accumulated depreciation (120,000) (105,000)
    Total land and buildings $ $ 325,000
    Total assets $ $ 681,000

    Liabilities
    Notes payable $ 155,000 $ 124,000
    Accounts payable 197,000
    Total current liabilities $ 322,000 $ 321,000
    Long-term debt $ $ 139,000

    Owners' Equity
    Common stock $ 30,000 $ 45,000
    Retained earnings 176,000
    Total owners' equity $ $ 221,000
    Total liabilities and owners' equity $ $ 681,000

    Instructions:

    Please proceed to the "Analysis" worksheet and complete the basic problem requirements. Complete the problem
    requirements by entering appropriate amounts or formulas in shaded worksheet cells:

    a. Complete the December 31, 2002 balance sheet. (Hint: Long-term debt is the last number to compute to make
    the balance sheet balance.)
    b. Prepare a statement of cash flows for the year ended December 31, 2002, using the indirect method.

    After completing the "Analysis" worksheet, please proceed to the "What the Numbers Mean" worksheet and respond
    to the additional problem requirements.

    ACCOUNTING: What the Numbers Mean, 5e
    Chapter 9 Problem 9-25 Name: Enter Name

    Complete the Modeling:

    a. Complete the December 31, 2002, balance sheet.

    HOEMAN, INC.
    Comparative Balance Sheets
    At December 31, 2002, and 2001

    2002 2001
    Assets
    Cash $ 52,000 $ 46,000
    Accounts receivable 134,000
    Inventory 156,000 176,000
    Total current assets $ $ 356,000
    Land $ 140,000
    Buildings 290,000
    Less: Accumulated depreciation (120,000) (105,000)
    Total land and buildings $ $ 325,000
    Total assets $ $ 681,000

    Liabilities
    Notes payable $ 155,000 $ 124,000
    Accounts payable 197,000
    Total current liabilities $ 322,000 $ 321,000
    Long-term debt $ $ 139,000

    Owners' Equity
    Common stock $ 50,000 $ 45,000
    Retained earnings 176,000
    Total owners' equity $ 50,000 $ 221,000
    Total liabilities and owners' equity $ $ 681,000

    b. Prepare a statement of cash flows for the year ended December 31, 2002, using the indirect method.

    HOEMAN, INC.
    Statement of Cash Flows
    For the Year Ended December 31, 2002

    Cash Flows from Operating Activities:
    $
    Add (deduct) items not affecting cash:

    Net cash provided by operating activities $ -

    Cash Flows from Investing Activities:
    $

    Cash Flows from Financing Activities:
    $

    Net cash provided by financing activities $ -
    Net increase in cash for the year $ -

    ACCOUNTING: What the Numbers Mean, 5e
    Chapter 9 Problem 9-25 Name: Enter Name

    What does it mean? Question 1:
    Explain, in general, why "Net Income" is different than "Net Cash Provided by Operating Activities" for
    the year ended December 31, 2002, for Hoeman, Inc.

    What does it mean? Question 2:
    Evaluate the change in cash for the year ended December 31, 2002, for Hoeman, Inc. Has Hoeman, Inc.
    generated most of its cash requirements from operations? Has its uses of cash been balanced between
    investments and dividends?

    © BrainMass Inc. brainmass.com June 3, 2020, 4:48 pm ad1c9bdddf
    https://brainmass.com/business/financial-statements/hoeman-inc-balance-sheet-evaluate-change-cash-4925

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    Solution Preview

    Read the attached excel worksheet which has the solution.

    Problem as Presented 2,002 2001
    Assets
    Cash 52,000 46000
    Accounts Receivable 124,000 134000
    Inventory 156,000 176000
    Total Current Assets 332,000 356000

    Land 140,000 140,000
    Buildings 415,000 290000
    Less: Accumulated Depreciation (120,000) -105000
    Total Land and Buildings 435,000 325000
    Total Assets 767,000 681000

    Liabilities
    Notes Payable 155,000 124000
    Accounts Payable 167,000 197000
    Total Current Liabilities 322,000 321000
    Long Term Debt 192,000 139000

    Owners Equity
    Common Stock 50,000 45000
    Retained Earnings 203,000 176000
    Total Owners Equity 253,000 221000
    Total Liabilities and Owners Equity 767,000 681000

    Facts Given in the problem 2,002
    Net Income 94,000
    Dividends Paid 67,000
    Accounts Receivable Decreased By 10,000
    Cost of New Building Acquired 125,000
    Buildings Sold 0
    Fair Market Value of Land on 12/31/02 178,000 ...

    Solution Summary

    The solution in Excel presents the completed balance sheet and a detailed computation and explanation of the change in cash. The narrative portion of the solution is well done and easy to understand.

    $2.19

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