Below are Lebnas Corp.’s 2019 income statement and comparative balance sheet at 12/31/2019 and 12/31/2018. Additional information: On December 31, 2018, Lebnas acquired 25% of Island ’s common stock for $609,000. On that date, the carrying value of Island’s assets and liabilities, which approximated their fair values, was $2,435,000. Island reported income of $319,000 for the year ended December 31, 2019. No dividend income was received by Lebnas on Island’s common stock during the year 2019. During 2018, Lebnas loaned $797,500 to POI , an unrelated company. POI made the first semi-annual principal repayment of $72,500, plus interest at 10%, on December 31, 2018. POI is current on the loan as of December 31, 2019. On January 2, 2019, Lebnas sold equipment costing $145,000, with a carrying amount of $44,950 for cash. On December 31, 2019, Lebnas entered into a finance lease for a new The present value of the annual rental payments is $1,232,500, which equals the fair value of the building. Lebnas will make the first rental payment of $174,000 on 1/2/2020. Note: The right of use asset is included in Property, Plant and Equipment on the balance sheet. Depreciation expense of $230,550 is included in Cost of Goods Sold. Lebnas declared and paid cash dividends as 2019 2018 Declared Paid Amount December 15, 2019 February 28, 2020 $145,000 December 15, 2018 February 28, 2019 $87,000 Required: Prepare a statement of cash flows for Lebnas Corp. for the year ended 12/31/2019, using the indirect method and good form, including footnote disclosures. Lebnas Corporation Balance Sheet As of 12/31 … 2019 2018 diff Cash 942,500 739,500 Accounts receivable 1,827,000 1,580,500 Inventory 2,230,100 1,986,500 Property, plant, and equipment 3,886,000 2,556,350 Accumulated depreciation (1,232,500) (1,102,000) Investment in Island Co. 688,750 609,000 Loan receivable 507,500 652,500 Total assets 8,849,350 7,022,350 Accounts payable 1,566,000 1,319,500 Income taxes payable 130,500 108,750 Dividends payable 145,000 87,000 Lease Liability 1,232,500 Common stock, $1 par 580,000 580,000 Paid-in capital in excess of par 3,045,000 3,045,000 Retained earnings 2,150,350 1,882,100 Total liabilities and stockholders’ equity 8,849,350 7,022,350 Lebnas Corporation Income Statement For the year … 2019 Sales 1,377,500 Cost of goods sold* (1,001,950) Gross profit 375,550 Loss on equipment sold (15,950) Investment income (Island Co.) 79,750 Income tax expense (26,100) Net Income 413,250 *Includes depreciation expense.
Below are Lebnas Corp.’s 2019 income statement and comparative
Additional information:
- On December 31, 2018, Lebnas acquired 25% of Island ’s common stock for $609,000. On that date, the carrying value of Island’s assets and liabilities, which approximated their fair values, was $2,435,000. Island reported income of $319,000 for the year ended December 31, 2019. No dividend income was received by Lebnas on Island’s common stock during the year 2019.
- During 2018, Lebnas loaned $797,500 to POI , an unrelated company. POI made the first semi-annual principal repayment of $72,500, plus interest at 10%, on December 31, 2018. POI is current on the loan as of December 31, 2019.
- On January 2, 2019, Lebnas sold equipment costing $145,000, with a carrying amount of $44,950 for cash.
- On December 31, 2019, Lebnas entered into a finance lease for a new The present value of the annual rental payments is $1,232,500, which equals the fair value of the building. Lebnas will make the first rental payment of $174,000 on 1/2/2020.
Note: The right of use asset is included in Property, Plant and Equipment on the balance sheet.
Depreciation expense of $230,550 is included in Cost of Goods Sold.
- Lebnas declared and paid cash dividends as
|
2019 |
|
2018 |
Declared Paid Amount |
December 15, 2019 February 28, 2020 $145,000 |
|
December 15, 2018 February 28, 2019 $87,000 |
Required: Prepare a statement of
Lebnas Corporation
Balance Sheet
As of 12/31 …
2019 |
2018 |
diff |
||
Cash |
942,500 |
739,500 |
|
|
|
1,827,000 |
1,580,500 |
|
|
Inventory |
2,230,100 |
1,986,500 |
|
|
Property, plant, and equipment |
3,886,000 |
2,556,350 |
|
|
|
(1,232,500) |
(1,102,000) |
|
|
Investment in Island Co. |
688,750 |
609,000 |
|
|
Loan receivable |
507,500 |
652,500 |
|
|
Total assets |
8,849,350 |
7,022,350 |
|
|
|
|
|||
Accounts payable |
1,566,000 |
1,319,500 |
|
|
Income taxes payable |
130,500 |
108,750 |
|
|
Dividends payable |
145,000 |
87,000 |
|
|
Lease Liability |
1,232,500 |
|
|
|
Common stock, $1 par |
580,000 |
580,000 |
|
|
Paid-in capital in excess of par |
3,045,000 |
3,045,000 |
|
|
|
2,150,350 |
1,882,100 |
|
|
Total liabilities and |
8,849,350 |
7,022,350 |
|
|
Lebnas Corporation
Income Statement
For the year …
2019 |
|
|
Sales |
1,377,500 |
|
Cost of goods sold* |
(1,001,950) |
|
Gross profit |
375,550 |
|
Loss on equipment sold |
(15,950) |
|
Investment income (Island Co.) |
79,750 |
|
Income tax expense |
(26,100) |
|
Net Income |
413,250 |
|
*Includes depreciation expense.
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