Comparative balance sheets for 2021 and 2020 and an income statement for 2021 areprovided below for Keegan Industries.Assets:Diff.20212020Cash1,8255,3751,1255,850700Accounts Receivable475Inventory2,7001,5751,125Land (includes right-of-use land)BuildingLess: Accumulated Depreciation2,0251,8002252,700(900)2,700(810)(90)EquipmentLess: Accumulated Depreciation8,5506,7501,800(135)(1,575)(1,440)20,70017,550Liabilities and Equity:Accounts Payable3,1502,0251,125Lease Liability - LandCommon StockPaid-in Capital - Excess of ParRetained Earnings4504509,0009,0002,0252,0256,0754,5001,57520,70017,550Sales Revenue7,935Gain on Sale of Land270Cost of Goods SoldDepreciation Expense - Building2,79006Depreciation Expense – Equipment855Loss on Sale of EquipmentOperating Expenses451,500Net Income2,925Additional Information: During 2021, equipment costing $900 (80% depreciated) was sold.Required:Prepare a statement of cash flows for the fiscal year 2021 in good form. TAccounts with beginning and ending balances for balance sheet accounts areincluded. You are not required to complete these.

Cash Flow Statement A cash flow statement (CFS) is a financial statement that shows how much cash and cash equivalents are coming in and going out of a business. The CFS assesses a company's ability to manage its cash position, or how successfully it generates cash. The CFS is a useful addition to the balance sheet and income statement. Cash is the most important component of the CFS, and it comes from three sources: operating, investing, and financing operations. The direct technique and the indirect method are the two approaches for determining cash flow. In the given question we are provided with the comparative balance sheet of 2021 and 2020 and income statement of 2021. With the given information we are required to prepare cash flow statement for the year 2021 which is prepared as under in the following step:Cash Flow Statement for the year 2021 Cash flow from Operating activities 1,600 Cash flow from Investing activities -900 Cash flow from Financing activities - Net increase/decrease in Cash 700 Add: Opening Balance of Cash & Cash equivalents 1,125 Closing Balance of Cash & Cash Equivalents 1,825 Cash flow from Operating activities (Indirect Method) Net profit before tax & Extra ordinary items 2,925 Adjustment for: Depreciation On Building 90 Depreciation On Equipment 135 Invesments - Gain on sale of Fixed Assets 270 Loss on Sale of Equipment -45 Dividend - Operating Profit before Working Capital Changes 3,375 Adjustment for: Trade and other receivables 475 Inventories -1,125 Trade payables -1,125 Cash generated from operations 1,600 Interest paid - Direct taxes - Cash before extra ordinary items 1,600 Deferred Revenue - Net cash Flow from Operating Activities 1,600 Cash Flow from Investing Activities Purchase of Equipment -1,800 Add: Proceeds from sale of Equipment 900 Add: Interest Received - Add: Dividend Received - Net Cash Flow from Investing Activities -900 Cash Flow from Financing Activities Proceeds from Issue of Share Capital - Proceeds from Long Term Borrowings - Repayment of Long Term Borrowings - Interest Paid - Dividend Paid Net Cash Flow from Financing Activities -

Business

Accounting

Comparative balance sheets for 2021 and 2020 and an income statement for 2021 are provided below for Keegan Industries. Assets: 2021 2020 Diff. 1,825 5,375 1,125 Cash 700 Accounts Receivable 5,850 475 Inventory 2,700 1,575 1,125 Land (includes right-of-use land) 2,025 1,800 225 Building Less: Accumulated Depreciation 2,700 (900) 2,700 (810) (90) 1,800 (135) Equipment 6,750 Less: Accumulated Depreciation 8,550 (1,575) (1,440) 20,700 17,550 Liabilities and Equity: Accounts Payable Lease Liability - Land Common Stock Paid-in Capital - Excess of Par Retained Earnings 3,150 2,025 1,125 450 450 9,000 2,025 9,000 2,025 6,075 4,500 1,575 20,700 17,550 Sales Revenue 7,935 Gain on Sale of Land 270 2,790 Cost of Goods Sold Depreciation Expense - Building Depreciation Expense – Equipment Loss on Sale of Equipment Operating Expenses 90 855 45 Net Income 1,500 2,925 Additional Information: During 2021, equipment costing $900 (80% depreciated) was sold. Required: Prepare a statement of cash flows for the fiscal year 2021 in good form. T Accounts with beginning and ending balances for balance sheet accounts are included. You are not required to complete these.

Comparative balance sheets for 2021 and 2020 and an income statement for 2021 are provided below for Keegan Industries. Assets: 2021 2020 Diff. 1,825 5,375 1,125 Cash 700 Accounts Receivable 5,850 475 Inventory 2,700 1,575 1,125 Land (includes right-of-use land) 2,025 1,800 225 Building Less: Accumulated Depreciation 2,700 (900) 2,700 (810) (90) 1,800 (135) Equipment 6,750 Less: Accumulated Depreciation 8,550 (1,575) (1,440) 20,700 17,550 Liabilities and Equity: Accounts Payable Lease Liability - Land Common Stock Paid-in Capital - Excess of Par Retained Earnings 3,150 2,025 1,125 450 450 9,000 2,025 9,000 2,025 6,075 4,500 1,575 20,700 17,550 Sales Revenue 7,935 Gain on Sale of Land 270 2,790 Cost of Goods Sold Depreciation Expense - Building Depreciation Expense – Equipment Loss on Sale of Equipment Operating Expenses 90 855 45 Net Income 1,500 2,925 Additional Information: During 2021, equipment costing $900 (80% depreciated) was sold. Required: Prepare a statement of cash flows for the fiscal year 2021 in good form. T Accounts with beginning and ending balances for balance sheet accounts are included. You are not required to complete these.

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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Subject: acounting