Homework Chapter 5 The balance sheet for Jackson Corp. as of December 31, 2010 is shown below.

During 2011 the following occurred: 1. Equipment was purchased for $27,000. 2. An additional $14,000 in common stock was issued at par. 3. Dividends totaling $6,000 were declared and paid to stockholders. 4. Net income for 2011 was $12,000. 5. Depreciation expense was $8,000. 6. Jackson sold all of its investments (available for sale) at a loss of $9,000. 7. Additional bonds in the amount of $16,000 were issued. 8. At December 31, 2011, Cash was 54,000, Accounts Receivable was $39,000 and Accounts Payable was $19,000. The worksheet below is provided for your use in posting the 2011 transactions. The worksheet is not required and will not be graded but it will probably be helpful to you. Submit both a Statement of Cash Flows and a Balance Sheet in good form. Jackson Corp. Statement of Cash Flows Worksheet December 31, 2011 use of cash 12-31-10 Assets Cash Accounts Receivable Investments Equipment Accum Deprn Land 35,000 190,000 32,000 29,000 25,000 69,000 27,000 8,000 22,000 10,000 25,000 54,000 39,000 0 96,000 (8,000) 35,000 216,000 Dr. source of cash Cr. 12-31-11

Liabilities & Stockholders Equity Accounts Payable Bonds Payable Common Stock Retained Earnings 29,000 45,000 79,000 37,000 190,000 75,000 75,000 6,000 10,000 16,000 14,000 12,000 19,000 61,000 93,000 43,000 216,000

Submit both a Statement of Cash Flows and a Balance Sheet in good form.

You may present the schedule below or on the next sheet in the workbook. Sometimes it is easier to deal with spacing issues if you use a separate sheet for the schedules.

Jackson Corp. Statement of Cash Flows Worksheet For the Year Ended December 31, 2011

Cash flows from operating activities Net income Adjustments to reconcile net income to net cash provided by operating activities: Depreciation expense Loss on sale of investments Increase in accounts receivable Decrease in accounts payable Net cash provided by operating activities

12,000

8,000 9,000 (10,000) (10,000)

(3,000) 9,000

Cash flows from investing activities Proceeds from sale of investments Purchase of equipment Net cash used by investing activities Cash flows from financing activities Issuance of bonds Issuance of common stock Payment of dividends on common stock Net cash provided by financing activities Net increase in cash Cash, beginning of year Cash, end of year

16,000 (27,000) (11,000)

16,000 14,000 (6,000) 24,000 22,000 32,000 $ 54,000

Jackson Corp. Balance Sheet December 31, 2011 Assets

Current assets

Cash Accounts receivable Total current assets

Property, plant, and equipment

54,000 39,000 93,000

Land Equipment Accumulated depreciation Total assets

$ $ 96,000 (8,000)

35,000 88,000 $ 123,000 216,000

Liabilities and Stockholders' Equity

Current liabilities

Accounts payable Total current liabilities

Long-term debt

19,000 $ 19,000

Bonds payable Total liabilities

Stockholders' equity

61,000 80,000

Common stock Retained earnings Total stockholders' equity Total liabilities and stockholders' equity

93,000 43,000 136,000 $ 216,000

Because this balance sheet is relatively simple, an unclassified balance sheet is also acceptable. Total liabilities must be calculated and properly identified.