Accumulated depreciation-equipment Inventory Accounts receivable Cash (29,000) 30,000 33,000 (24,000) 20,000 14,000 20,000 £108,000 37,000 Total £131,000 Equity and Liabilities Share capital-ordinary Retained earnings Bonds payable Accounts payable Income taxes payable £ 18,000 50,000 £ 14,000 38,000 33,000 15,000 27,000 29,000 7,000 8,000 £108,000 Total £131,000 Rajesh Ltd. Income Statement For the Year Ended December 31, 2020 Sales revenue Cost of goods sold Gross profit Operating expenses Income from operations Interest expense £242,000 175,000 67,000 24,000 43,000 3,000 40,000 8,000 £ 32,000 Income before income taxes Income tax expense Net income Additional data: 1. Depreciation expense is £13,300, 2. Dividends declared and paid were £20,000. 3. During the ycar, equipment was sold for £9,700 cash. This equipment cost £18,000 originally and had accumulated depreciation of £8,300 at the time of sale. Instructions a. Prepare a statement of cash flows using the indirect method. R Additional Information 1. Accounts payable pertain to merchandise suppliers. 2. All operating expenses except for depreciation were paid in cash. 3. All depreciation expense is in the operating expenses. 4. All sales and purchases are on account. b. Prepare a statement of cash flows for Rajesh using the direct method.
Accumulated depreciation-equipment Inventory Accounts receivable Cash (29,000) 30,000 33,000 (24,000) 20,000 14,000 20,000 £108,000 37,000 Total £131,000 Equity and Liabilities Share capital-ordinary Retained earnings Bonds payable Accounts payable Income taxes payable £ 18,000 50,000 £ 14,000 38,000 33,000 15,000 27,000 29,000 7,000 8,000 £108,000 Total £131,000 Rajesh Ltd. Income Statement For the Year Ended December 31, 2020 Sales revenue Cost of goods sold Gross profit Operating expenses Income from operations Interest expense £242,000 175,000 67,000 24,000 43,000 3,000 40,000 8,000 £ 32,000 Income before income taxes Income tax expense Net income Additional data: 1. Depreciation expense is £13,300, 2. Dividends declared and paid were £20,000. 3. During the ycar, equipment was sold for £9,700 cash. This equipment cost £18,000 originally and had accumulated depreciation of £8,300 at the time of sale. Instructions a. Prepare a statement of cash flows using the indirect method. R Additional Information 1. Accounts payable pertain to merchandise suppliers. 2. All operating expenses except for depreciation were paid in cash. 3. All depreciation expense is in the operating expenses. 4. All sales and purchases are on account. b. Prepare a statement of cash flows for Rajesh using the direct method.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
For Qb direct method
Transcribed Image Text:Accumulated depreciation-equipment
Inventory
Accounts receivable
Cash
(29,000)
30,000
33,000
37,000
(24,000)
20,000
14,000
20,000
Total
£131,000
£108,000
Equity and Liabilities
Share capital-ordinary
Retained earnings
Bonds payable
Accounts payable
Income taxes payable
£ 18,000
£ 14,000
38,000
50,000
27,000
29,000
7,000
33,000
15,000
8,000
Total
£131,000
£108,000
Rajesh Ltd.
Income Statement
For the Year Ended December 31, 2020
Sales revenue
£242.000
Cost of goods sold
175,000
Gross profit
Operating expenses
Income from operations
Interest expense
67,000
24,000
43,000
3,000
Income before income taxes
Income tax expense
40,000
8,000
Net income
£ 32,000
Additional data:
1. Depreciation expense is £13,300,
2. Dividends declared and paid were £20,000.
3. During the ycar, equipment was sold for £9,700 cash. This equipment cost £18,000 originally and
had accumulated depreciation of £8,300 at the time of sale.
A.
Instructions
a. Prepare a statement of cash flows using the indirect method,
R. Additional Infor mation
1. Accounts payable pertain to merchandise suppliers.
2. All operating expenses except for depreciation were paid in cash.
3. All depreciation expense is in the operating expenses.
4. All sales and purchases are on account.
b.
Prepare a statement of cash flows for Rajesh using the direct method.
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