Problem
Sheffield Inc. had the following balance sheet at December 31, 2016.
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SHEFFIELD INC.
BALANCE SHEET
DECEMBER 31, 2016
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Cash
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$23,050
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Accounts payable
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$33,050
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Accounts receivable
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24,250
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Notes payable (long-term)
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44,050
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Investments
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35,050
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Common stock
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103,050
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Plant assets (net)
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81,000
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Retained earnings
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26,250
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Land
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43,050
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$206,400
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$206,400
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During 2017, the following occurred.
1. Sheffield Inc. sold part of its investment portfolio for $16,260. This transaction resulted in a gain of $4,660 for the firm. The company classifies its investments as available-for-sale.
2. A tract of land was purchased for $16,050 cash.
3. Long-term notes payable in the amount of $17,260 were retired before maturity by paying $17,260 cash.
4. An additional $21,260 in common stock was issued at par.
5. Dividends of $9,460 were declared and paid to stockholders.
6. Net income for 2017 was $35,050 after allowing for depreciation of $12,260.
7. Land was purchased through the issuance of $38,050 in bonds.
8. At December 31, 2017, Cash was $40,050, Accounts Receivable was $44,650, and Accounts Payable remained at $33,050.
Prepare a statement of cash flows for 2017. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)
Prepare an unclassified balance sheet as it would appear at December 31, 2017. (List Assets in order of liquidity.)
Compute two cash flow ratios.