Other information:a. All sales are credit sales.b. All credits to accounts receivable in the period are receipts from customers.c. Purchases of merchandise are on credit.d. All debits to accounts payable in the period result from payments for merchandise.e. The only decrease in income taxes payable is for payment of taxes.f. The other expenses are paid in advance and are initially debited to Prepaid Expenses.Required:Prepare a statement of cash flows for 2020 using the direct method to report cash inflows and outflows from operating activities. (Listany deduction in cash and cash outflows as negative amounts.)ICE DRILLING INC.Statement of Cash FlowsFor Year Ended December 31, 2020Cash flows from operating activities:Cash flows from investing activities:Cash flows from financing activities: ICE Drilling Inc's balance sheet information and income statement are as follows:ICE Drilling Inc.Income StatementFor Year Ended December 31, 2020Sales$1,112,600565,000$ 547,600Cost of goods soldGross profitOperating expenses:Depreciation expense47,000306,760Other expensesTotal operating expensesProfit from operationsLoss on sale of equipment353,760$ 193,84012,480$ 181,36028,160$ 153, 200Profit before taxesIncome taxesProfitICE Drilling Inc.Comparative Balance Sheet InformationDecember 3120202019$ 125,680$ 176,640116,160570,60019,000251,400103,560252,24019,000121,400355,000282,600CashAccounts receivableMerchandise inventoryPrepaid expensesEquipmentAccumulated depreciationAccounts payableCurrent notes payableNotes payable150,600618, 20012,090358, 28082,560193,45027,400210,000455,800295,640Common sharesRetained earningsAdditional information regarding ICE Drilling's activities during 2020:1. Loss on sale of equipment is $12,480.2. Paid $71,280 to reduce a long-term note payable.3. Equipment costing $110,000, with accumulated depreciation of $68,000, is sold for cash.4. Equipment costing $216,880 is purchased by paying cash of $57,000 and signing a long-term note payable for the balance.5. Borrowed $8,400 by signing a short-term note payable.6. Issued 10,080 common shares for cash at $10 per share.7. Declared and paid cash dividends of $140,160.

The question is based on the concept of Cash flow statement. Cash flow statement is the statement…

Other information: a. All sales are credit sales. b. All credits to accounts receivable in the period are receipts from customers. c. Purchases of merchandise are on credit. d. All debits to accounts payable in the period result from payments for merchandise. e. The only decrease in income taxes payable is for payment of taxes. f. The other expenses are paid in advance and are initially debited to Prepaid Expenses. Required: Prepare a statement of cash flows for 2020 using the direct method to report cash inflows and outflows from operating activities any deduction in cash and cash outflows as negative amounts.) ICE DRILLING INC. Statement of Cash Flows For Year Ended December 31, 2020 Cash flows from operating activities:

Other information: a. All sales are credit sales. b. All credits to accounts receivable in the period are receipts from customers. c. Purchases of merchandise are on credit. d. All debits to accounts payable in the period result from payments for merchandise. e. The only decrease in income taxes payable is for payment of taxes. f. The other expenses are paid in advance and are initially debited to Prepaid Expenses. Required: Prepare a statement of cash flows for 2020 using the direct method to report cash inflows and outflows from operating activities any deduction in cash and cash outflows as negative amounts.) ICE DRILLING INC. Statement of Cash Flows For Year Ended December 31, 2020 Cash flows from operating activities:

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Allowance for Uncollectible Accounts is a contra asset account, which means that its normal balance is a credit. However, it is possible for the account to have a debit balance before year-end adjustments are recorded. Explain how this could happen. How does an accountant calculate the year-end adjustment for Allowance for Uncollectible Accounts with a debit balance before year-end adjustments recorded? Please explain both answers in good detail answer
Which of the following accounts will get affected when cash is received from sale made on account in the last month? a. Cash and Service Revenue b. Cash and Accounts Receivable c. Cash and Salary Expense d. Cash and Notes Payable
If a fictitious sale has been recorded, this affects the a) existence of sales. b) valuation of accounts receivable. c) occurrence of sales and existence of accounts receivable. d) occurrence of accounts receivable.
If the balance in Cash Short and Over at the end of a period is a credit, it should be reported as "Other Income" on the income statement. Please explain with full explanation. a. True b. False
What does the phrase "Revenue is recognized at the point of sale" mean? (Assume the company reports using ASPE.) a.Revenue is recorded in the accounting records when the goods are sold to a customer and reported on the statement of earnings when the cash payment is received from the customer. b.Revenue is recorded in the accounting records and reported on the statement of earnings when the cash is received from the customer. c.Revenue is recorded in the accounting records when the cash is received from a customer and reported on the statement of earnings when sold to the customer. d.Revenue is recorded in the accounting records and reported on the statement of earnings when goods are sold and delivered to a customer.
The normal balance of the account "Sales Allowances" is a Debit; it is a contra revenue account to Sales Revenue OB. Credit; it is a contra asset account to Accounts Receivable OC. Debit, it is an expense in the income statement OD. Credit, it is a contra expense account to Bad Debt Expense -because A.
b. Assume that Joey's Bike Shop uses the direct write-off method of accounting for uncollectible accounts. Answer the following questions: (1) What is the Accounts Receivable balance at December 31, Year 1? (2) What is the amount of uncollectible accounts expense for Year 1? (3) What is the net realizable value of accounts receivable at December 31, Year 1?
The accounting treatment of Discount on bill discounted is: a. A current liability b. A current asset c. An income for a bank d. An expenses for a bank
Which of the following transactions will be recorded in cash payment journal? a. Receipt of income b. Purchase of goods on credit c. Sale of goods for cash d. Payment of monthly expenses
Under the accrual basis of accounting - if cash has been received before the revenue has been earned, which of the following journal entries should be recorded? A) Debit Cash, Credit Unearned Revenue. B) Debit Cash, Credit Sales Revenue. C) Debit Unearned Revenue, Credit Cash. D) Debit Cash, Credit Accounts Receivable.
When goods are delivered after an advance receipt of cash, Unearned Sales Revenue is debited. Cash is debited. Unearned Sales Revenue is credited. Sales Revenue is debited. choose the correct ans
23) Under the allowance method, the entry to record the write-off of a specific account would A. Decrease both accounts receivable and net income B. Increase the allowance for uncollectible accounts and decrease net income C. Decrease both accounts receivable and the allowance for uncollectible accounts D. Decrease accounts receivable and increase the allowance for uncollectible accounts