BALANCE SHEET AS AT DECEMBER 31, 2021 2022 $ $ $ $ $ Non-Current Assets COST DEPN NBV COST DEPN NBV Goodwill 40,000 Building 300,000 300,000 450,000 25,000 450,000 Equipment 155.000 35,000 120.000 455.000 35,000 460,000 Long Term Investments 120.000 580,000 180,000 42.000 138.000 630.000 42.000 613,000 140.000 753,000 CURRENT ASSETS Stock 20,000 18,000 Short Term Investment 22,000 25,000 Debtors 10,000 12,000 Bank 12,500 0 Cash 3,200 67,700 1,700 56,700 647.700 809.700 EQUITY & LIABILITIES Capital & Reserves Share Capital ($1 Ord. Shares) 200,000 225,000 Share Premium 25,000 40,000 Reval. Reserve 0 150,000 General Reserves 22,500 55,000 120,000 367,500 195,000 665,000 Retained Eamings Non-Current Liabilities 10% Debenture 214,700 91,200 CURRENT LIABILITIES Creditors 16,500 Tax Payable 17,000 15,000 10.000 Interest Payable 10,000 8.500 Dividends Payable 22.000 65.000 20,000 $3,500 G47.700 809.700

BALANCE SHEET AS AT DECEMBER 31, 2021 2022 $ $ $ $ $ Non-Current Assets COST DEPN NBV COST DEPN NBV Goodwill 40,000 Building 300,000 300,000 450,000 25,000 450,000 Equipment 155.000 35,000 120.000 455.000 35,000 460,000 Long Term Investments 120.000 580,000 180,000 42.000 138.000 630.000 42.000 613,000 140.000 753,000 CURRENT ASSETS Stock 20,000 18,000 Short Term Investment 22,000 25,000 Debtors 10,000 12,000 Bank 12,500 0 Cash 3,200 67,700 1,700 56,700 647.700 809.700 EQUITY & LIABILITIES Capital & Reserves Share Capital ($1 Ord. Shares) 200,000 225,000 Share Premium 25,000 40,000 Reval. Reserve 0 150,000 General Reserves 22,500 55,000 120,000 367,500 195,000 665,000 Retained Eamings Non-Current Liabilities 10% Debenture 214,700 91,200 CURRENT LIABILITIES Creditors 16,500 Tax Payable 17,000 15,000 10.000 Interest Payable 10,000 8.500 Dividends Payable 22.000 65.000 20,000 $3,500 G47.700 809.700

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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Atkins Corporation has provided the following information for the year ended December 31, 2019:• The equipment account balance increased $200,000.• The equipment accumulated depreciation account increased $35,000.• Equipment costing $50,000 was sold during the year resulting in a $10,000 gain.• Depreciation expense on the equipment recorded during the year was $65,000. Which of the following statements is incorrect with respect to preparation of the statement of cash flows? Assume that the equipment purchase and sale resulted in cash flows. A. A $60,000 cash inflow is reported from the equipment sale. B. Using the indirect method, net income is increased by the $65,000 depreciation expense. C. Using the indirect method, net income is decreased by the $10,000 gain on the sale of the equipment. D. A $30,000 cash inflow is reported from the equipment sale.
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