| DICE CORP'S BALANCE SHEET AND STATEMENT OF CASH FLOWS | December 31 | December 31 | Delta | |||
| Information Related to year 2 activities | Assets | Year 2 | Year 1 | |||
| Net income for year 2 was $690,000 | Cash | 195,000 | 100,000 | 95,000 | ||
| Cash dividends of $240000 were declared and paid in year 2 | Short-term investments | 300,000 | 0 | -300,000 | ||
| Equipment costing $400,000 and having a carrying amount | Account receivables (net) | 480,000 | 510,000 | 30,000 | ||
| of $150,000 was sold on January 1, year 2 for $150,000 in cash | Inventory | 680,000 | 600,000 | -80,000 | ||
| A long-term investment was sold in year 2 for $135,000 | Prepaid Expenses | 15,000 | 20,000 | 5,000 | ||
| 10,000 common shares were issued in year 2 for $22 a share | Long-term investments | 215,000 | 300,000 | 85,000 | ||
| Short-term investments consist of Treasury bills maturing on | Plant assets | 1,700,000 | 1,000,000 | -700,000 | ||
| 6/30/year 3. They are not cash equivalents because | Accumulated depreciation | -450,000 | -450,000 | 0 | ||
| their maturities are not 3 months or less | Intangible assets | 90,000 | 100,000 | 10,000 | ||
| The provision of year 2 income taxes was $210,000 | Total assets | 3,225,000 | 2,180,000 | |||
| The accounts receivable balance of beg. and end of year 2 were | ||||||
| net of allowances for bad debts of $50,000 and $60,000 | Liabilities and Equity | |||||
| respectfully. Dice wrote off $40,000 of bad debts during year 2. | Accounts payable | 825,000 | 720000 | 105,000 | ||
| The only transactions affecting accounts receivable and the | Interest payable | 15,000 | 10,000 | 5,000 | ||
| allowances were credit sales, collections, write-offs, and | Income tax payable | 20,000 | 30,000 | -10,000 | ||
| recognition of bad debt expense. | Short-term debt | 325,000 | 0 | 325,000 | ||
| During year 2, Dice constructed a plant asset. The accumulated | Deferred taxes | 250,000 | 300,000 | -50,000 | ||
| expenditures during the year included $11,000 of captitalized | Common stock, $10 par | 800,000 | 700,000 | 100,000 | ||
| interest. | Addition paid-in capital | 370,000 | 250,000 | 120,000 | ||
| Dice accounts for its interest in the Thrice Corp. under the equity | Retains earnings | 620000 | 170,000 | 450,000 | ||
| method. Its equity in Thrice's year 2 earnings was $25,000. | Total equities | 3,225,000 | 2,180,000 | |||
| At the end of year 2, Dice received a $10,000 cash dividend | ||||||
| from Thrice. | ||||||
| Explanation of calcuations | Reconciliation of Net Income to Net Operating Cash Flow | |||||
| Given from line 1 cell (A3) in Year 2 activities explanation | Net income for year 2 | $690,000 | ||||
| No change in accum. dep. but add (depreciation expensed from Equipment sold: 400K-150K | Depreciation | 250,000 | ||||
| The depreciation & the 10K at 12/31 y2 amortization s/b added to net income b/c both or non cash items included in net income | Amortization | 10,000 | ||||
| Increase in inventory decreases cash | Inventory | -80,000 | ||||
| Increase in AP increases cash | Accounts Payable | 105,000 | ||||
| Decreases in AR increases cash | Accounts receivable (net) | 30,000 | ||||
| Decreases in Prepaid expenses increases cash | Prepaid expenses | 5,000 | ||||
| A cash dividend from the affiliate is debited to cash and credited to the investment acct. Need 15K adjustment. | Undistributed earnings of an affiliate | -15,000 | ||||
| <<discuss this further>> | Gain on sale of investments | -35,000 | ||||
| Increase in interest payable increases cash | Interest payable | 5,000 | ||||
| Tax expense was less than cash paid for taxes | Income tax payable | -10,000 | ||||
| Deferred taxes decreased by 50K.Cash pmt for taxes exceeded tax expense. | Deferred taxes | -50,000 | ||||
| Net operating cash flow | 905,000 |