Comparative statement of financial position accounts of Kopi Co. presented below:Required:Prepare statement of cash flows using direct method and explain the result! Kopi Co.Comparative Statement of Financial Position AccountsAs of December 31, 2019 and 2018Dec 31, 2019Dec 31, 2018DebitCash168,000135,000Accounts Receivable282,000240,000Inventory120,00096,000 Equity Investment (non-trading)89,000154,000Machinery120,00075,000Buildings270,000225,000Land30,00030,0001,079,000955,000CreditAllowance for Doubtful Accounts9,0006,000Accm. Depreciation – Machinery22,5009,000Accm. Depreciation – Buildings54,00036,000Accounts Payable140,00099,000Accrued Payable13,50010,500Long-Term Notes Payable84,000124,000Share Capital – Ordinary, no par600,000500,000Retained Earnings156,0001,079,000170,500955,000Additional data (ignoring taxes):1. Sales revenue for the year was $2,160,000, COGS was $1,520,000, operating expense was$481,800 (includes depreciation and bad debt expense), net income was $170,000.2. Bad debt expense for the year was $21,600.3. The cash dividend declared in 2019 was fully paid in 2019.4. A 20% share dividend was declared during the year.5. Equity investments that cost $100,000 were sold during the year for $115,000.6. Machinery that cost $15,000, on which $3,000 of depreciation had accumulated, was sold for$8,800.

Cash Flow Statement: Cash flow statement show the cash comes in or goes out during the specified…

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Business

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Comparative Statement of Financial Position Accounts As of December 31, 2019 and 2018 Dec 31, 2019

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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Comparative statement of financial position accounts of Kopi Co. presented below:

Required:
Prepare statement of cash flows using direct method and explain the result!

Kopi Co.
Comparative Statement of Financial Position Accounts
As of December 31, 2019 and 2018
Dec 31, 2019
Dec 31, 2018
Debit
Cash
168,000
135,000
Accounts Receivable
282,000
240,000
Inventory
120,000
96,000

Equity Investment (non-trading)
89,000
154,000
Machinery
120,000
75,000
Buildings
270,000
225,000
Land
30,000
30,000
1,079,000
955,000
Credit
Allowance for Doubtful Accounts
9,000
6,000
Accm. Depreciation – Machinery
22,500
9,000
Accm. Depreciation – Buildings
54,000
36,000
Accounts Payable
140,000
99,000
Accrued Payable
13,500
10,500
Long-Term Notes Payable
84,000
124,000
Share Capital – Ordinary, no par
600,000
500,000
Retained Earnings
156,000
1,079,000
170,500
955,000
Additional data (ignoring taxes):
1. Sales revenue for the year was $2,160,000, COGS was $1,520,000, operating expense was
$481,800 (includes depreciation and bad debt expense), net income was $170,000.
2. Bad debt expense for the year was $21,600.
3. The cash dividend declared in 2019 was fully paid in 2019.
4. A 20% share dividend was declared during the year.
5. Equity investments that cost $100,000 were sold during the year for $115,000.
6. Machinery that cost $15,000, on which $3,000 of depreciation had accumulated, was sold for
$8,800.

Definition Definition Net amount of cash that an entity receives and expends over the course of a given period. For a business to continue operating, positive cash flows are required, and they are also necessary to produce value for investors. Investors in particular prefer to see growing cash flows even after capital expenditures have been paid for (which is known as free cash flow).

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