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P23-4 (LO2, 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 45,000 50,000 Inventory 42,000 35,000 Prepaid rent 3,000 12,000 Prepaid insurance 2,100 900 Supplies 1,000 750 Accounts receivable 20,500 12,950 Short-term equity investments Cash 22,000 30,000 10,000 4,000 Total assets Share capital-ordinary £910,600 £871,100 £240,000 £220,000 Share premium-ordinary 25,000 17,500 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 Income taxes payable Salaries and wages payable Short-term notes payable Total equity and liabilities Michaels Ltd. 5,000 4,000 5,000 3,000 10,000 10,000 £910,600 £871,100 Income Statement For the Year Ended December 31, 2022 Sales revenue £1,160,000 Cost of goods sold (748,000) Gross margin 412,000 Operating expenses Selling expenses £79,200 Administrative expenses 156,700 Depreciation/Amortization expense 40,500 Total operating expenses (276,400) Income from operations 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 98,250 Income tax expense Net income Dividends to ordinary shareholders (39,400) 58,850 (24,300) To retained earnings £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 (LO2, 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 45,000 50,000 Inventory 42,000 35,000 Prepaid rent 3,000 12,000 Prepaid insurance 2,100 900 Supplies 1,000 750 Accounts receivable 20,500 12,950 Short-term equity investments Cash 22,000 30,000 10,000 4,000 Total assets Share capital-ordinary £910,600 £871,100 £240,000 £220,000 Share premium-ordinary 25,000 17,500 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 Income taxes payable Salaries and wages payable Short-term notes payable Total equity and liabilities Michaels Ltd. 5,000 4,000 5,000 3,000 10,000 10,000 £910,600 £871,100 Income Statement For the Year Ended December 31, 2022 Sales revenue £1,160,000 Cost of goods sold (748,000) Gross margin 412,000 Operating expenses Selling expenses £79,200 Administrative expenses 156,700 Depreciation/Amortization expense 40,500 Total operating expenses (276,400) Income from operations 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 98,250 Income tax expense Net income Dividends to ordinary shareholders (39,400) 58,850 (24,300) To retained earnings £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.

Principles of Accounting Volume 1
Principles of Accounting Volume 1
19th Edition
ISBN:9781947172685
Author:OpenStax
Publisher:OpenStax
Chapter11: Long-term Assets
Section: Chapter Questions
Problem 8PA: Referring to PA7 where Kenzie Company purchased a 3-D printer for $450,000, consider how the...
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P23-4 (LO2, 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 45,000 50,000 Inventory 42,000 35,000 Prepaid rent 3,000 12,000 Prepaid insurance 2,100 900 Supplies 1,000 750 Accounts receivable 20,500 12,950 Short-term equity investments Cash 22,000 30,000 10,000 4,000 Total assets Share capital-ordinary £910,600 £871,100 £240,000 £220,000 Share premium-ordinary 25,000 17,500 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 Income taxes payable Salaries and wages payable Short-term notes payable Total equity and liabilities Michaels Ltd. 5,000 4,000 5,000 3,000 10,000 10,000 £910,600 £871,100 Income Statement For the Year Ended December 31, 2022 Sales revenue £1,160,000 Cost of goods sold (748,000) Gross margin 412,000 Operating expenses Selling expenses £79,200 Administrative expenses 156,700 Depreciation/Amortization expense 40,500 Total operating expenses (276,400) Income from operations 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 98,250 Income tax expense Net income Dividends to ordinary shareholders (39,400) 58,850 (24,300) To retained earnings £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 (LO2, 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 45,000 50,000 Inventory 42,000 35,000 Prepaid rent 3,000 12,000 Prepaid insurance 2,100 900 Supplies 1,000 750 Accounts receivable 20,500 12,950 Short-term equity investments Cash 22,000 30,000 10,000 4,000 Total assets Share capital-ordinary £910,600 £871,100 £240,000 £220,000 Share premium-ordinary 25,000 17,500 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 Income taxes payable Salaries and wages payable Short-term notes payable Total equity and liabilities Michaels Ltd. 5,000 4,000 5,000 3,000 10,000 10,000 £910,600 £871,100 Income Statement For the Year Ended December 31, 2022 Sales revenue £1,160,000 Cost of goods sold (748,000) Gross margin 412,000 Operating expenses Selling expenses £79,200 Administrative expenses 156,700 Depreciation/Amortization expense 40,500 Total operating expenses (276,400) Income from operations 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 98,250 Income tax expense Net income Dividends to ordinary shareholders (39,400) 58,850 (24,300) To retained earnings £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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