Following are the consolidated Statement of Financial Position accounts of Bracker Inc. and its subsidiary, Dorie Corporation, as of December 31, 2019 and 2018. 2018 $ 195,000 175,000 2019 Assets $ 313,000 175,000 Cash Marketable Equity Securities, at cost Allowance to Reduce Marketable Equity Securities to Market (13,000) 418,000 595,000 385,000 755,000 (24,000) 440,000 525,000 170,000 690,000 (145,000) 60,000 2.086.000 Accounts Receivable, net Inventories Land Plant & Equipment Accumulated Depreciation Goodwill, net of impairment Total Assets (199,000) 57.000 2.486.000 Liabilities & Stockholders' Equity Current Portion of Long-Term Note Accounts Payable & Accrued Liabilities Notes Payable, Long-Term 150,000 595,000 300,000 44,000 179,000 150,000 474,000 450,000 32,000 161,000 480,000 180,000 Deferred Income Taxes Non-Controlling Interest Common Stock, $10 par Additional Paid-In Capital Retained Earnings Treasury Stock, at cost Total Liabilities & Stockholders' Equity 580,000 303,000 335,000 195,000 (36.000) 2.086,000 2.486.000 Additional Information: 1) On January 20, 2019, Bracker issued 10,000 shares of its common stock for land having a fair value of $215,000. 2) On February 05, 2019, Bracker re-issued all of its treasury stock for $44,000. 3) On May 15, 2019, Bracker paid a $58,000 cash dividend on its common stock. 4) On August 08, 2019, Bracker purchased equipment for $127,000. 5) On September 30, 2019, Bracker sold equipment for $40,000. The equipment cost $62,000 and had a carrying value of $34,000 on the date of sale. 6) On December 15, 2019, Dorie paid a cash dividend of $50,000 on its common stock. 7) Bracker recognized a goodwill impairment loss of $3,000 in 2019. 8) Deferred income taxes represent temporary differences relating to the use of accelerated depreciation methods for income tax reporting and the straight line method for financial reporting. { 3 } 9) 2019 Net income: Consolidated Net Income of $231,000 and Dorie Corporation of $110,000 10) Bracker owns 70 percent of its subsidiary, Dorie. No change in the ownership interest in Dorie occurred during 2018 and 2019. No intercompany transactions occurred other than the dividends paid to Bracker by its subsidiary.
Reporting Cash Flows
Reporting of cash flows means a statement of cash flow which is a financial statement. A cash flow statement is prepared by gathering all the data regarding inflows and outflows of a company. The cash flow statement includes cash inflows and outflows from various activities such as operating, financing, and investment. Reporting this statement is important because it is the main financial statement of the company.
Balance Sheet
A balance sheet is an integral part of the set of financial statements of an organization that reports the assets, liabilities, equity (shareholding) capital, other short and long-term debts, along with other related items. A balance sheet is one of the most critical measures of the financial performance and position of the company, and as the name suggests, the statement must balance the assets against the liabilities and equity. The assets are what the company owns, and the liabilities represent what the company owes. Equity represents the amount invested in the business, either by the promoters of the company or by external shareholders. The total assets must match total liabilities plus equity.
Financial Statements
Financial statements are written records of an organization which provide a true and real picture of business activities. It shows the financial position and the operating performance of the company. It is prepared at the end of every financial cycle. It includes three main components that are balance sheet, income statement and cash flow statement.
Owner's Capital
Before we begin to understand what Owner’s capital is and what Equity financing is to an organization, it is important to understand some basic accounting terminologies. A double-entry bookkeeping system Normal account balances are those which are expected to have either a debit balance or a credit balance, depending on the nature of the account. An asset account will have a debit balance as normal balance because an asset is a debit account. Similarly, a liability account will have the normal balance as a credit balance because it is amount owed, representing a credit account. Equity is also said to have a credit balance as its normal balance. However, sometimes the normal balances may be reversed, often due to incorrect journal or posting entries or other accounting/ clerical errors.
Required:
Prepare a consolidated statement of
December 31, 2019.
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