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Auga Company Comparative Balance Sheet December 31, 2021 and 2020 2021 2020 Increase/(Decrease) Assets Cash 15,000 175,000 230,000 310,000 30,000 Accounts Receivable Inventories 220,000 340,000 10,000 Prepaid expenses Intangible assets Equipment, net Total Assets Liabilities 105,000 860,000 1.710,000 1.520,000 105,000 830,000 Accounts payable Accrued liabilities 90,000 190,000 140,000 160,000 Income tax payable Long-term notes payable Stockholders' Equity Common Stock Retained earnings Treasury stock Total liabilities and stockholders' equity 1.710,000 1,520,000 120,000 140,000 Scenario: 360,000 450,000 400,000 640,000 (90,000) 250,000 400,000 The 2021 comparative balance sheet and income statement of Auga Company Ltd, have just been distributed at a meeting of the company's board of directors. The members of the board of directors were desirous of knowing the reason or reasons why the cash balance different from the net income. The company uses the indirect method to prepare the statement of cash flows and it is expected that this should be able to provide the needed clarity required by the directors. The directors have asked each student from your accounting course to assist with the needed clarification and have put forward the following financial information grouped according to your first name initial. (20,000) Auga Company Ltd Income Statement Year Ended December 31,2021 Revenues and gains: 1,900,000 20,000 Sales revenue Gain on sale of plant assets Total revenues and gains Expenses Cost of goods sold Depreciation expense Other operating expense Total expenses Income before income taxes Income tax expense Net Income 1,920,000 850,000 190,000 360,000 1,400,000 520,000 180,000 340,000 Notes 320,000 120,000 10,000 Acquisition of plant asset during 2021 Sale proceeds from sale of plant asset Receipt for issuance of notes payable Payment for note payable Dividend paid Book value of equipment sold 100,000 100,000 100,000

Auga Company Comparative Balance Sheet December 31, 2021 and 2020 2021 2020 Increase/(Decrease) Assets Cash 15,000 175,000 230,000 310,000 30,000 Accounts Receivable Inventories 220,000 340,000 10,000 Prepaid expenses Intangible assets Equipment, net Total Assets Liabilities 105,000 860,000 1.710,000 1.520,000 105,000 830,000 Accounts payable Accrued liabilities 90,000 190,000 140,000 160,000 Income tax payable Long-term notes payable Stockholders' Equity Common Stock Retained earnings Treasury stock Total liabilities and stockholders' equity 1.710,000 1,520,000 120,000 140,000 Scenario: 360,000 450,000 400,000 640,000 (90,000) 250,000 400,000 The 2021 comparative balance sheet and income statement of Auga Company Ltd, have just been distributed at a meeting of the company's board of directors. The members of the board of directors were desirous of knowing the reason or reasons why the cash balance different from the net income. The company uses the indirect method to prepare the statement of cash flows and it is expected that this should be able to provide the needed clarity required by the directors. The directors have asked each student from your accounting course to assist with the needed clarification and have put forward the following financial information grouped according to your first name initial. (20,000) Auga Company Ltd Income Statement Year Ended December 31,2021 Revenues and gains: 1,900,000 20,000 Sales revenue Gain on sale of plant assets Total revenues and gains Expenses Cost of goods sold Depreciation expense Other operating expense Total expenses Income before income taxes Income tax expense Net Income 1,920,000 850,000 190,000 360,000 1,400,000 520,000 180,000 340,000 Notes 320,000 120,000 10,000 Acquisition of plant asset during 2021 Sale proceeds from sale of plant asset Receipt for issuance of notes payable Payment for note payable Dividend paid Book value of equipment sold 100,000 100,000 100,000

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Auga Company Ltd Comparative Balance Sheet December 31, 2021 and 2020 2021 2020 Increase/(Decrease) Assets Cash 15,000 175,000 230,000 Accounts Receivable 220,000 310,000 30,000 105,000 Inventories 340,000 10,000 Prepaid expenses Intangible assets Equipment, net Total Assets 105,000 ? 830,000 1.520,000 860,000 ? 1,710,000 Liabilities Accounts payable Accrued liabilities Income tax payable Long-term notes payable Stockholders' Equity Common Stock Retained earnings Treasury stock Total liabilities and stockholders' equity 1,710,000 90,000 140,000 190,000 120,000 360,000 160,000 140,000 ? Scenario: 450,000 400,000 250,000 ? The 2021 comparative balance sheet and income statement of Auga Company Ltd, have just been distributed at a meeting of the company's board of directors. The members of the board of directors were desirous of knowing the reason or reasons why the cash balance different from the net income. The company uses the indirect method to prepare the statement of cash flows and it is expected that this should be able to provide the needed clarity required by the directors. The directors have asked each student from your accounting course to assist with the needed clarification and have put forward the following financial information grouped according to your first name initial. 640,000 400,000 (90,000) (20,000 1,520,000 Auga Company Ltd Income Statement Year Ended December 31,2021 Revenues and gains: Sales revenue Gain on sale of plant assets 20,000 Total revenues and gains Expenses Cost of goods sold Depreciation expense Other operating expense Total expenses Income before income taxes Income tax expense Net Income 1,900,000 1,920,000 850,000 190,000 360,000 1,400.000 520,000 180,000 340,000 Notes Acquisition of plant asset during 2021 320,000 Sale proceeds from sale of plant asset Receipt for issuance of notes payable Payment for note payable Dividend paid 120,000 10,000 100,000 100,000 100,000 Book value of equipment sold
Transcribed Image Text:Auga Company Ltd Comparative Balance Sheet December 31, 2021 and 2020 2021 2020 Increase/(Decrease) Assets Cash 15,000 175,000 230,000 Accounts Receivable 220,000 310,000 30,000 105,000 Inventories 340,000 10,000 Prepaid expenses Intangible assets Equipment, net Total Assets 105,000 ? 830,000 1.520,000 860,000 ? 1,710,000 Liabilities Accounts payable Accrued liabilities Income tax payable Long-term notes payable Stockholders' Equity Common Stock Retained earnings Treasury stock Total liabilities and stockholders' equity 1,710,000 90,000 140,000 190,000 120,000 360,000 160,000 140,000 ? Scenario: 450,000 400,000 250,000 ? The 2021 comparative balance sheet and income statement of Auga Company Ltd, have just been distributed at a meeting of the company's board of directors. The members of the board of directors were desirous of knowing the reason or reasons why the cash balance different from the net income. The company uses the indirect method to prepare the statement of cash flows and it is expected that this should be able to provide the needed clarity required by the directors. The directors have asked each student from your accounting course to assist with the needed clarification and have put forward the following financial information grouped according to your first name initial. 640,000 400,000 (90,000) (20,000 1,520,000 Auga Company Ltd Income Statement Year Ended December 31,2021 Revenues and gains: Sales revenue Gain on sale of plant assets 20,000 Total revenues and gains Expenses Cost of goods sold Depreciation expense Other operating expense Total expenses Income before income taxes Income tax expense Net Income 1,900,000 1,920,000 850,000 190,000 360,000 1,400.000 520,000 180,000 340,000 Notes Acquisition of plant asset during 2021 320,000 Sale proceeds from sale of plant asset Receipt for issuance of notes payable Payment for note payable Dividend paid 120,000 10,000 100,000 100,000 100,000 Book value of equipment sold
Requirements 1. Answer the following questions for the directors: G. True or false, suppose Auga Company Ltd just started business and was looking for additional capital in order to purchase a property to build their headquarters. If they found an investor who was willing to sell them land worth $500,000 in exchange for stock in the company, would this transaction be shown in the investing activities section of the statement of cash flows?
Transcribed Image Text:Requirements 1. Answer the following questions for the directors: G. True or false, suppose Auga Company Ltd just started business and was looking for additional capital in order to purchase a property to build their headquarters. If they found an investor who was willing to sell them land worth $500,000 in exchange for stock in the company, would this transaction be shown in the investing activities section of the statement of cash flows?
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