Partial Balance Sheets for Yarborough Company and Additional Information Are

question 32

Essay

Partial balance sheets for Yarborough Company and additional information are found below. $\begin{array} {c } \text {Yarborough Company }\\ \text {Partial Balance Sheets }\\ \text { as of December 31}\\\begin{array}{|l|l|l|}\hline\text { Assets } & 2018 & 2017 \\\hline\text { Equipment } & \$ 100,000 & \$ 75,000 \\\hline \text { Accumulated } & & \\\text { depreciation } & (25,000) & (20,000) \\\hline \text { Shareholders' equity } & & \\\hline \text { Common stock, \$5 par } & \$ 150,000 & \$ 100,000 \\\hline \text { Paid-in capital-excess of } & & \\\text { par } & 20,000 & 0 \\\hline \text { Retained earnings } & 40,000 & 30,000\\\hline\end{array}\end{array}$ $$\begin{array}{l}\text { Additional information for } 2018 \text { : }\\\begin{array} { | l | l | } \hline \text { Tuly 1: } & \text { Issued } 10,000 \text { shares of common stock for cash. } \\\hline \text { July 1: } & \text { Purchased new equipment for cash. } \\\hline \text { Dec. 31 } & \text { Paid cash dividends of } \$ 30,000\\\hline\end{array}\end{array}$$ Required:
Prepare the investing activities section of the statement of cash flows for 2018.

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Definitions:

Savings Function

A mathematical expression that depicts how savings vary with changes in income, usually stating that savings are a function of disposable income.

Induced Consumption

The portion of consumer spending that varies with changes in disposable income, suggesting that as people earn more, they spend more.

Autonomous Consumption

The level of consumption that occurs when income is zero, reflecting the basic level of consumption that does not vary with disposable income.

Disposable Income

Monetary provision for households to engage in saving and spending after the imposition of income taxes.