Condensed financial data of Pat Metheny Company for 2020 and 2019 are presented below. Pat Metheny CompanyComparative Balance SheetAs of December 31, 2020 and 2019 2020 2019 Cash $1,800 $1,150 Receivables 1,750 1,300 Inventory 1,600 1,900 Plant assets 1,900 1,700 Accumulated depreciation (1,200) (1,170) Long-term investments (held-to-maturity) 1,300 1,420 $7,150 $6,300 Accounts payable $1,200 $ 900 Accrued liabilities 200 250 Bonds payable 1,400 1,550 Common stock 1,900 1,700 Retained earnings 2,450 1,900 $7,150 $6,300 Pat Metheny CompanyIncome StatementFor the Year Ended December 31, 2020 Sales revenue $6,900 Cost of goods sold 4,700 Gross margin 2,200 Selling and administrative expense 930 Income from operations 1,270 Other revenues and gains Gain on sale of investments 80 Income before tax 1,350 Income tax expense 540 Net income 810 Cash dividends 260 Income retained in business $ 550 Additional information: During the year, $70 of common stock was issued in exchange for plant assets. No plant assets were sold in 2020. Instructions Prepare a statement of cash flows 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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Condensed financial data of Pat Metheny Company for 2020 and 2019 are presented below.

Pat Metheny Company Comparative Balance Sheet As of December 31, 2020 and 2019
		2020	2019
Cash	$1,800	$1,150
Receivables	1,750	1,300
Inventory	1,600	1,900
Plant assets	1,900	1,700
Accumulated depreciation	(1,200)	(1,170)
Long-term investments (held-to-maturity)	1,300	1,420
	$7,150	$6,300
Accounts payable	$1,200	$ 900
Accrued liabilities	200	250
Bonds payable	1,400	1,550
Common stock	1,900	1,700
Retained earnings	2,450	1,900
	$7,150	$6,300

Pat Metheny Company Income Statement For the Year Ended December 31, 2020
Sales revenue		$6,900
Cost of goods sold	4,700
Gross margin	2,200
Selling and administrative expense	930
Income from operations	1,270
Other revenues and gains Gain on sale of investments	80
Income before tax	1,350
Income tax expense	540
Net income	810
Cash dividends	260
Income retained in business	$ 550

Additional information:

During the year, $70 of common stock was issued in exchange for plant assets. No plant assets were sold in 2020.

Instructions

Prepare a statement of cash flows using the indirect method.

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