Mr. Wizard's Magic Shoppe had the following condensed balance sheet at the end of operation for 2010:

Question

Mr. Wizard's Magic Shoppe
Balance Sheet
December 31, 2010
Cash $40,000 Current Liabilities $35,000
Other current assets 60,000 Long-term Notes Payable 40,000
Total current assets $100,000 Bonds Payable 50,000
Investments $25,000 Capital Stock 150,000
Fixed assets (net) 110,000 Retained earnings 80,000
Land $120,000
Total assets $355,000 Total Liabilities and Equity $355,000
During 2011, the following occurred
a. Mr. Wizard's sold some of its investments for $13,000 which resulted in a gain of
$300 after taxes. The gain (net of taxes) has been included in the company's 2011 net income.
b. Additional land for a plant expansion was purchased for $25,000.
c. Bonds payable were paid in the amount of $10,000.
d. An additional $35,000 in capital stock was issued.
e. Dividends of $15,000 were paid to stockholders.
f. Net income for 2011 was $48,000 after allowing for $15,000 in depreciation.
g. A second parcel of land was purchased through the issuance of $10,000 in bonds,
and $5,000 in long-term notes payable.
Required:
a. Prepare a statement of cash flows for the year ended 12/31/2011.
(check figure: ending cash balance = $72,500)
b. Prepare a condensed balance sheet for Mr. Wizard's at December 31, 2011.

Answer 1

Mr. Wizard's Magic Shoppe
Statement of Cash Flow
For the Year Ended December 31, 2011
Cash balance (December 31,