Donna, Inc. has prepared the following comparative balance sheets for 2020 and 2021: 2021 2020 Cash $ 327,120 $ 177,480 Accounts receivable 161,240 135,720 Inventory 174,000 208,800 Prepaid expenses 20,880 31,320 Plant assets 1,502,200 1,218,000 Accumulated depreciation (522,000) (435,000) Patents 177,480 201,840 $1,840,920 $1,538,160 Accounts payable $ 177,480 $ 194,880 Accrued liabilities 69,600 48,720 Martgage payable ― 522,000 Preferred stock 609,000 ― Additional paid-in capital—preferred 139,200 ― Common stock 696,000 696,000 Retained earnings 149,640 76,560 $1,840,920 $1,538,160 1. The Accumulated Depreciation account has been credited only for the depreciation expense for the period. 2. The Retained Earnings account has been charged for dividends of $160,080 and credited for the net income for the year. The income statement for 2021 is as follows: Sales revenue $2,296,800 Cost of sales 1,263,240 Gross profit 1,033,560 Operating expenses 800,400 Net income $ 233,160 A. From the information above, prepare a statement of cash flows (indirect method) for Donna, Inc. for the year ended December 31, 2021. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).) B.From the information above, prepare a schedule of cash provided by operating activities using the direct 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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Donna, Inc. has prepared the following comparative balance sheets for 2020 and 2021:

	2021	2020
Cash	$ 327,120		$ 177,480
Accounts receivable	161,240		135,720
Inventory	174,000		208,800
Prepaid expenses	20,880		31,320
Plant assets	1,502,200		1,218,000
Accumulated depreciation	(522,000)	(435,000)
Patents	177,480		201,840
	$1,840,920		$1,538,160
Accounts payable	$ 177,480		$ 194,880
Accrued liabilities	69,600		48,720
Martgage payable	―		522,000
Preferred stock	609,000		―
Additional paid-in capital—preferred	139,200		―
Common stock	696,000		696,000
Retained earnings	149,640		76,560
	$1,840,920		$1,538,160

1.		The Accumulated Depreciation account has been credited only for the depreciation expense for the period.
2.		The Retained Earnings account has been charged for dividends of $160,080 and credited for the net income for the year.

The income statement for 2021 is as follows:
	Sales revenue	$2,296,800
	Cost of sales	1,263,240
	Gross profit	1,033,560
	Operating expenses	800,400
	Net income	$ 233,160

A. From the information above, prepare a statement of cash flows (indirect method) for Donna, Inc. for the year ended December 31, 2021. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)

B.From the information above, prepare a schedule of cash provided by operating activities using the direct method.

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