| 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). |
| | | | | | | Account Balances |
| | | | | | | June 30, 2016 | June 30, 2017 |
| | Debits |
| | Cash | | | | | $ 361,700 | $ 880,550 |
| | Accounts Receivable | | | | | 100,000 | 125,000 |
| | Marketable Securities (at cost) | | | | | 11,700 | 13,000 |
| | Allowance for Change in Value | | | | | 1,500 | 1,800 |
| | Construction in Process | | | | | 168,750 | 405,000 |
| | Prepaid Expenses | | | | | 45,000 | 10,000 |
| | Investments (long-term) | | | | | - 0 | 13,500 |
| | Leased Equipment | | | | | - 0 | 20,000 |
| | Building | | | | | 30,000 | - 0 |
| | Deferred tax asset | | | | | 5,375 | 2,200 |
| | Land | | | | | 10,500 | 10,500 |
| | Discount on Bonds Payable | | | | | - 0 | 1,305 |
| | Totals | | | | | 734,525 | 1,482,855 |
| | | | | | | | | | | | | - 0 |
| | Credits |
| | Allowance for doubtful accounts | | | | | $ 6,000 | $ 4,500 |
| | Accounts Payable | | | | | 87,500 | 210,000 |
| | Deferred tax liability | | | | | 1,000 | 3,300 |
| | Income Taxes Payable | | | | | 3,500 | 9,000 |
| | Note Payable (long-term) | | | | | 3,500 | - 0 |
| | Accumulated Depreciation on Building | | | | | 2,500 | - 0 |
| | Accumulated Depreciation on Leased Asset | | | | | - 0 | 3,000 |
| | Lease obligation | | | | | - 0 | 18,000 |
| | Interest payable on lease obligation | | | | | - 0 | 1,800 |
| | Interest payable (Bonds) | | | | | - 0 | 1,800 |
| | Bonds payable | | | | | - 0 | 45,000 |
| | Billings on contruction in process | | | | | 150,000 | 325,000 |
| | Pension liability | | | | | 150,000 | 400,000 |
| | Convertible preferred stock, $100 par | | | | | 9,000 | - 0 |
| | Common Stock, $10 par | | | | | 14,000 | 24,500 |
| | Additional Paid-in Capital | | | | | 8,700 | 13,700 |
| | Unrealized Increase in Value of Marketable Securities | | | | | 1,500 | 1,800 |
| | Retained Earnings | | | | | 297,325 | 421,455 |
| | Totals | | | | | 734,525 | 1,482,855 |
| | Additional information: |
| | a. Dividends declared and paid totaled $650. |
| | b. 300 shares of common stock (at par) were issued for cash. |
| | c. On July 1, 2016, convertible preferred stock that had originally been issued at par value were |
| | converted into 500 shares of common stock. The book value method was used to account for the |
| | conversion. |
| | d. The long-term note payable was paid by issuing 250 shares of common stock at the beginning of the |
| | fiscal year. |
| | e. Short-term marketable securities were purchased at a cost of $1,300. The portfolio was increased by |
| | $300 to a $14,800 fair value at year-end by adjusting the related allowance account. |
| | f. During the year, a 30% interest in Ricochet Co. was purchased as an investment for $9,500. Ricochet |
| | reported $20,000 in net income for the year and paid dividends of $2,000 to Smart. |
| | g. $5,000 of accounts receivable were written off as uncollectible during the year. |
| | h. Smart’s inventory consists of Construction-in-Process in excess of the Billings on |
| | Construction-in-Process account balance. |
| | i. A building was destroyed by fire during the year and insurance proceeds of $26,000 were collected. |
| | j. The 12% bonds payable were issued on February 28, 2017, at 97. They mature on February 28, 2027. |
| | The company uses the straight-line method to amortize bond premiums and discounts. |
| | k. Smart recorded pension expense of $350,000 for the year. |
| | l. A lease agreement was signed on July 1st, 2016 for the use of equipment worth $20,000. The |
| | company determined that the transaction should be recorded as a capital lease. |
