Additional information related to 2021 are as follows: a. Equipment that had cost $11,100 and was 30% depreciated at time of disposal was sold for $2,500. b. $5,000 of the long-term note payable was paid by issuing common stock. c. Distributed cash dividends of $5,000 that was declared in 2020. d. On January 1, 2021, the building was completely destroyed by a flood. Insurance proceeds on the building were $33,200 (net of $4,000 taxes). e. Equity investments (ownership is less than 20% of total shares) were sold at $1,400 above their cost. No unrealized gains or losses were recorded in 2021. f. Cash and a long-term note for $16,000 were given for the acquisition of equipment. g. Interest of $2,000 and income taxes of $4,900 were paid in cash. Required: Use the indirect method to prepare a statement of cash flows for Sky Corporation.

Additional information related to 2021 are as follows: a. Equipment that had cost $11,100 and was 30% depreciated at time of disposal was sold for $2,500. b. $5,000 of the long-term note payable was paid by issuing common stock. c. Distributed cash dividends of $5,000 that was declared in 2020. d. On January 1, 2021, the building was completely destroyed by a flood. Insurance proceeds on the building were $33,200 (net of $4,000 taxes). e. Equity investments (ownership is less than 20% of total shares) were sold at $1,400 above their cost. No unrealized gains or losses were recorded in 2021. f. Cash and a long-term note for $16,000 were given for the acquisition of equipment. g. Interest of $2,000 and income taxes of $4,900 were paid in cash. Required: Use the indirect method to prepare a statement of cash flows for Sky Corporation.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

1
7. On January 1, 2020 Gingerbread, Corp. purchased a reindeer merry-go-round as an attraction to draw customers during the holiday season. The following information is available: Invoice price $280,000 Shipping cost $4,000 Set-up cost $2,000 Insurance to cover years 2020 and 2021 $12,000 Necessary repair during set-up 500 Determine the amount to be record as the capitalized cost of the asset. a.286,000 b.280,000 c.286,500 d.298,500
1. Compute for the carrying value of the intangible assets at December 31, 2019. 2. How much is the Net Income (Loss) of the company for the year ended December 31, 2019?
On November 1, 2021, a fire totally destroyed the building of ABC Company. The building cost of P2,000,000 and a carrying amount of P1,200,000 as of the date of the fire. A P1,000 claim was filed on November 15, 2021. On January 5, 2022, after due investigation, it was ABC is free of negligence and the insurance company agreed to pay ABC the P1,000,000 in 9. Prepare the entry on November 1, 2021, to record the impairment of the building. 10. Prepare the entry on January 5, 2022, to record the insurance claim.
Denger
14) The records for Ehrlich Co. show this data for 2021: Accrued revenue recorded on the books was $480,000. Revenue cash collections was $320,000. Life insurance on officers was $2,800. Fine for pollution violation was $1,000. Machinery was acquired in January for $300,000. Straight-line depreciation over a ten-year life (no salvage value) is used. For tax purposes, accelerated depreciation is used and Ehrlich may deduct 15% for 2021. Interest received on tax exempt Florida State bonds was $9,000. The estimated warranty liability related to 2021 sales was $23,000. Repair costs under warranties during 2021 were $12,000. Pretax financial income is $700,000. The tax rate is 25% for this and future years. Instructions (a) Prepare a schedule starting with pretax financial income and compute taxable income. (b) Prepare the journal entry to record income taxes for 2021. (c ) Show the income statement presentation of income tax expense, starting with "income before tax"
1. On November 4, 2020, GT Corporation sells a piece of its equipment. GT Corporation had initially purchased the equipment for $350,000. The company had recorded $230,000 in depreciation for this piece of equipment as of the date of sale. If GT Corporation receive $150,000 cash when they sell the equipment, they will report a November 2020 Income Statement; if they instead receive $100,000 cash when they sell the equipment, they will on their report a a. $150,000 gain; $100,000 gain. b. $80,000 gain; $130,000 loss. c. $30,000 loss; $20,000 gain. d. $30,000 gain; $20,000 loss.
H1.
On December 31, 2021, a machine owned by SLP COMPANY was destroyed by a fire. SLP COMPANY incurred removal and clean-up costs of P40,000. The machine had a book value of P450,000 and a fair value of P510,000 at the time of the fire. The machine was insured “new to old” and was replaced by the insurance company with a new one currently selling at P560,000. The loss due to fire to be reported in the 2021 income statement is
On October 1, 2021, Draper James paid $850,000 for equipment having an estimated useful life of 5 years with an estimated salvage value of $250,000. Depreciation is taken for the portion of the year the asset is used. Provide the depreciation expense using sum of years digits for 2024. 150,000 113,333 110,000 80,000 155,833
(a) What is the weighted average of accumulated expenditures? (b) What is the avoidable interest for the building in 2018?
On January 1, 2021, Bambi Ltd. purchased equipment for $728,000. The equipment was assumed to have an 8-year useful life and no residual value and was to be depreciated using the straight-line method. On January 1, 2023, Bambi's management became concernedthat the equipment may have become obsolete. Management calculated that the undiscounted future net cash flows from the equipment was $523,250, the discounted future net cash flows was $464,100, and the current fair value of the equipment less cost ofdisposal (of $1,800 ) was $455,000. c) Assuming that Bambi is a public Canadian company, identify which model should be used to test for impairment. d) Record the journal entry to record the impairment loss, if any. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List debit entry before credit entry.) Account Titles and Explanation Debit…