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P23-4 (LO 2, 3, 4) (SCF-Indirect Method) Michaels Ltd. had available at the end of 2022 the following information. Michaels Ltd. Comparative Statements of Financial Position As of December 31, 2022 and 2021 Land Buildings 2022 2021 £125,000 £175,000 350,000 350,000 Accumulated depreciation-buildings (105,000) (87,500) Equipment 525,000 400,000 Accumulated depreciation-equipment (130,000) (112,000) Patents Inventory Prepaid rent Prepaid insurance Supplies Accounts receivable Short-term equity investments Cash Total assets Share capital-ordinary 45,000 50,000 42,000 35,000 3,000 12,000 2,100 900 1,000 750 20,500 12,950 22,000 30,000 10,000 4,000 £910,600 £871,100 £240,000 £220,000 25,000 17,500 Share premium-ordinary Retained earnings 123,297 88,747 Long-term notes payable 60,000 70,000 Bonds payable 420,303 425,853 Accounts payable 22,000 32,000 Michaels Ltd. Comparative Statements of Financial Position As of December 31, 2022 and 2021 5,000 4,000 Income taxes payable Salaries and wages payable Short-term notes payable Total equity and liabilities 5,000 3,000 10,000 10,000 £910,600 £871,100 Michaels Ltd. Income Statement For the Year Ended December 31, 2022 Sales revenue £1,160,000 Cost of goods sold Gross margin (748,000) 412,000 Operating expenses Selling expenses £79,200 Administrative expenses 156,700 Depreciation/Amortization expense 40,500 Total operating expenses Income from operations (276,400) 135,600 Other income and expense Gain on sale of land 8,000 Gain on sale of short-term investment 4,000 Dividend revenue 2,400 Interest expense (51,750) (37,350) Income before taxes Income tax expense Net income Dividends to ordinary shareholders To retained earnings 98,250 (39,400) 58,850. (24,300) £34,550 Instructions Prepare a statement of cash flows for Michaels Ltd. using the direct method. Assume the short-term investments are non-trading. Bond premium amortized was £5,550.

P23-4 (LO 2, 3, 4) (SCF-Indirect Method) Michaels Ltd. had available at the end of 2022 the following information. Michaels Ltd. Comparative Statements of Financial Position As of December 31, 2022 and 2021 Land Buildings 2022 2021 £125,000 £175,000 350,000 350,000 Accumulated depreciation-buildings (105,000) (87,500) Equipment 525,000 400,000 Accumulated depreciation-equipment (130,000) (112,000) Patents Inventory Prepaid rent Prepaid insurance Supplies Accounts receivable Short-term equity investments Cash Total assets Share capital-ordinary 45,000 50,000 42,000 35,000 3,000 12,000 2,100 900 1,000 750 20,500 12,950 22,000 30,000 10,000 4,000 £910,600 £871,100 £240,000 £220,000 25,000 17,500 Share premium-ordinary Retained earnings 123,297 88,747 Long-term notes payable 60,000 70,000 Bonds payable 420,303 425,853 Accounts payable 22,000 32,000 Michaels Ltd. Comparative Statements of Financial Position As of December 31, 2022 and 2021 5,000 4,000 Income taxes payable Salaries and wages payable Short-term notes payable Total equity and liabilities 5,000 3,000 10,000 10,000 £910,600 £871,100 Michaels Ltd. Income Statement For the Year Ended December 31, 2022 Sales revenue £1,160,000 Cost of goods sold Gross margin (748,000) 412,000 Operating expenses Selling expenses £79,200 Administrative expenses 156,700 Depreciation/Amortization expense 40,500 Total operating expenses Income from operations (276,400) 135,600 Other income and expense Gain on sale of land 8,000 Gain on sale of short-term investment 4,000 Dividend revenue 2,400 Interest expense (51,750) (37,350) Income before taxes Income tax expense Net income Dividends to ordinary shareholders To retained earnings 98,250 (39,400) 58,850. (24,300) £34,550 Instructions Prepare a statement of cash flows for Michaels Ltd. using the direct method. Assume the short-term investments are non-trading. Bond premium amortized was £5,550.

FINANCIAL ACCOUNTING
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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P23-4 (LO 2, 3, 4) (SCF-Indirect Method) Michaels Ltd. had available at the end of 2022 the following information. Michaels Ltd. Comparative Statements of Financial Position As of December 31, 2022 and 2021 Land Buildings 2022 2021 £125,000 £175,000 350,000 350,000 Accumulated depreciation-buildings (105,000) (87,500) Equipment 525,000 400,000 Accumulated depreciation-equipment (130,000) (112,000) Patents Inventory Prepaid rent Prepaid insurance Supplies Accounts receivable Short-term equity investments Cash Total assets Share capital-ordinary 45,000 50,000 42,000 35,000 3,000 12,000 2,100 900 1,000 750 20,500 12,950 22,000 30,000 10,000 4,000 £910,600 £871,100 £240,000 £220,000 25,000 17,500 Share premium-ordinary Retained earnings 123,297 88,747 Long-term notes payable 60,000 70,000 Bonds payable 420,303 425,853 Accounts payable 22,000 32,000 Michaels Ltd. Comparative Statements of Financial Position As of December 31, 2022 and 2021 5,000 4,000 Income taxes payable Salaries and wages payable Short-term notes payable Total equity and liabilities 5,000 3,000 10,000 10,000 £910,600 £871,100 Michaels Ltd. Income Statement For the Year Ended December 31, 2022 Sales revenue £1,160,000 Cost of goods sold Gross margin (748,000) 412,000 Operating expenses Selling expenses £79,200 Administrative expenses 156,700 Depreciation/Amortization expense 40,500 Total operating expenses Income from operations (276,400) 135,600 Other income and expense Gain on sale of land 8,000 Gain on sale of short-term investment 4,000 Dividend revenue 2,400 Interest expense (51,750) (37,350) Income before taxes Income tax expense Net income Dividends to ordinary shareholders To retained earnings 98,250 (39,400) 58,850. (24,300) £34,550 Instructions Prepare a statement of cash flows for Michaels Ltd. using the direct method. Assume the short-term investments are non-trading. Bond premium amortized was £5,550.
Transcribed Image Text:P23-4 (LO 2, 3, 4) (SCF-Indirect Method) Michaels Ltd. had available at the end of 2022 the following information. Michaels Ltd. Comparative Statements of Financial Position As of December 31, 2022 and 2021 Land Buildings 2022 2021 £125,000 £175,000 350,000 350,000 Accumulated depreciation-buildings (105,000) (87,500) Equipment 525,000 400,000 Accumulated depreciation-equipment (130,000) (112,000) Patents Inventory Prepaid rent Prepaid insurance Supplies Accounts receivable Short-term equity investments Cash Total assets Share capital-ordinary 45,000 50,000 42,000 35,000 3,000 12,000 2,100 900 1,000 750 20,500 12,950 22,000 30,000 10,000 4,000 £910,600 £871,100 £240,000 £220,000 25,000 17,500 Share premium-ordinary Retained earnings 123,297 88,747 Long-term notes payable 60,000 70,000 Bonds payable 420,303 425,853 Accounts payable 22,000 32,000 Michaels Ltd. Comparative Statements of Financial Position As of December 31, 2022 and 2021 5,000 4,000 Income taxes payable Salaries and wages payable Short-term notes payable Total equity and liabilities 5,000 3,000 10,000 10,000 £910,600 £871,100 Michaels Ltd. Income Statement For the Year Ended December 31, 2022 Sales revenue £1,160,000 Cost of goods sold Gross margin (748,000) 412,000 Operating expenses Selling expenses £79,200 Administrative expenses 156,700 Depreciation/Amortization expense 40,500 Total operating expenses Income from operations (276,400) 135,600 Other income and expense Gain on sale of land 8,000 Gain on sale of short-term investment 4,000 Dividend revenue 2,400 Interest expense (51,750) (37,350) Income before taxes Income tax expense Net income Dividends to ordinary shareholders To retained earnings 98,250 (39,400) 58,850. (24,300) £34,550 Instructions Prepare a statement of cash flows for Michaels Ltd. using the direct method. Assume the short-term investments are non-trading. Bond premium amortized was £5,550.
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