Brecker Inc.Income StatementFor the Year Ending December 31, 2020Sales revenueCost of goods soldGross profitOperating expensesOperating incomeInterest expenseGain on sale of equipmentIncome before taxIncome tax expenseNet income$11,4002,000$338,150175,000163,150120,00043,1509,40033,7506,750$ 27,000Additional information:1. Dividends in the amount of $6,000 were declared and paid during 2020.2. Depreciation expense and amortization expense are included in operating expenses.3. No unrealized gains or losses have occurred on the investments during the year.4. Equipment that had a cost of $20,000 and was 70% depreciated was sold during 2020. InstructionsPrepare a statement of cash flows using the direct method. (Do not prepare a reconciliation schedule.)E23.13 (LO 2, 3) (SCF-Direct Method) Brecker Inc., a greeting card company, had the followingstatements prepared as of December 31, 2020.Brecker Inc.Comparative Balance SheetAs of December 31, 2020 and 2019CashAccounts receivableShort-term debt investments (available-for-sale)InventoryPrepaid rentEquipmentAccumulated depreciation-equipmentCopyrightsTotal assetsAccounts payableIncome taxes payableSalaries and wages payableShort-term loans payableLong-term loans payableCommon stock, $10 parContributed capital, common stockRetained earningsTotal liabilities and stockholders' equity12/31/20$ 6,00062,00035,00040,0005,000154,000(35,000)46,000$313,000$ 46,0004,0008,0008,00060,000100,00030,00057,000$313,00012/31/19$ 7,00051,00018,00060,0004,000130,000(25,000)50,000$295,000$ 40,0006,0004,00010,00069,000100,00030,00036,000$295,000

Under the Direct Method of preparing the Statement of Cash Flows, the cash inflows and outflows are…

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Business

Accounting

Prepare a statement of cash flows using the direct method. (Do not prepare a reconciliation schedule.)

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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