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
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter12: Fainancial Statement Analysis
Section: Chapter Questions
Problem 98.3C
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