Comparative balance sheets at December 31, 2020 and 2021 are show for the company below. 2020 2021 Cash 68,200 131,450 accounts receivable 81,400 86,900 Inventory 129,800 136,400 Prepaid expenses 5,500 6,600 Land 0 70,950 Plant assets 264,400 306,900 Accumulated depreciation (94,600) (88,000) Franchise 35,200 26,400 Total assets $471,900 $677,600 Accounts payable 45,100 58,300 Notes payable 69,300 63,800 Bonds payable 0 141,900 Common stock 275,000 302,500 Additional paid in capital 50,600 61,600 Retained earnings 31,900 49,500 Total liabilities and equity $471,900 $677,600 Additional Information: 1. A fully depreciated plant asset, which originally cost $22,000 and had no salvage value, was sold for $1,100. 2. Bonds payable were issued at par value. One-half of the bonds were exchanged for land; the remaining one-half was issued for cash. 3. Common stock was sold for cash. 4. The only entries in the Retained Earnings account are for dividends paid and for the net income for the year. You will have to calculate dividends paid from the information provided. 5. Normal depreciation expense was recorded during the year and the franchise was amortized. 6. The income statement for the year is as follows: sales $204,600 Cost of sales 112,200 gross profit 92,400 operating expenses 64,900 income before gain 27,500 Gain on sale of plant asset 1,100 Net income $28,600 instructions: prepare a statement of cash flows for 2021 using the indirect method

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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Question

Comparative balance sheets at December 31, 2020 and 2021 are show for the company below.

	2020	2021
Cash	68,200	131,450
accounts receivable	81,400	86,900
Inventory	129,800	136,400
Prepaid expenses	5,500	6,600
Land	0	70,950
Plant assets	264,400	306,900
Accumulated depreciation	(94,600)	(88,000)
Franchise	35,200	26,400
Total assets	$471,900	$677,600

Accounts payable	45,100	58,300
Notes payable	69,300	63,800
Bonds payable	0	141,900
Common stock	275,000	302,500
Additional paid in capital	50,600	61,600
Retained earnings	31,900	49,500
Total liabilities and equity	$471,900	$677,600

Additional Information:
1. A fully depreciated plant asset, which originally cost $22,000 and had no salvage value, was sold for $1,100.

2. Bonds payable were issued at par value. One-half of the bonds were exchanged for land; the remaining one-half was issued for cash.

3. Common stock was sold for cash.

4. The only entries in the Retained Earnings account are for dividends paid and for the net income for the year. You will have to calculate dividends paid from the information provided.

5. Normal depreciation expense was recorded during the year and the franchise was amortized.

6. The income statement for the year is as follows:

sales $204,600

Cost of sales 112,200

gross profit 92,400

operating expenses 64,900

income before gain 27,500

Gain on sale of plant asset 1,100

Net income $28,600

instructions:

prepare a statement of cash flows for 2021 using the indirect method

0
G
H
Comparative balance sheets at December 31, 2020 and 2021, for the Morse Company are shown below.
Balance Sheets
Cash
Accounts Receivable
Inventory
Prepaid Expenses
Land
Plant Assets
Accumulated Depreciation
Franchise
Total Assets
Accounts Payable
Notes Payable
Bonds Payable
Common Stock
Additional Paid-in Capital
Retained Earnings
Total Liabilities and Equity
2020
$68,200
81,400
129,800
5,500
0
246,400
(94,600)
35,200
$471,900
$45,100
69,300
0
275,000
50,600
31,900
$471,900
2021
$131,450
86,900
136,400
6,600
70,950
306,900
(88,000)
26,400
$677,600
$58,300
63,800
141,900
302,500
61,600
49,500
$677,600
Change

A1
2
3
/fox
Morse Company
Statement of Cash Flows
For the Year Ended December 31, 2021
S
6 Cash flows from operating activities
7
Adjustments to reconcile net income to net cash provided by
8 operating activities
9
10
12 Net cash provided by (used in) operating activities
13
14 Cash flows from investing activities
15
16
17
18 Net cash provided by (used in) investing activities
19
20 Cash flows from financing activities
21
22
23
24 Net cash provided by (used in) financing activities
25
26 Net increase in cash
27 Cash, January 1, 2021
28 Cash, December 31, 2021
29
30
B
+
C

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