Prepare a Statement of Cash Flows using the indirect method for the year ended 2020. Your Name, Inc.Your Name, Inc.Post Close Trial BalanceAdjusted Trial Balance2020 Entries andAdjustmentsDebits Credits277,200 259,1001,000194,0007,500198,00015,50031-Dec-1931-Dec-20DEBITS CREDITS17.0002,00014,000DEBITS CREDITS35,1001,000150,000CashMarketable SecuritiesAccounts Rec.330,0004,000180.00018,000Allowance for Bad Debt2,0005,5003,00015,0005,00030,000150,000InventoryPrepaid Insurance7.50030,000150,000LandBuildingAccumulated Dep. - BuildingEquipmentAccumulated Dep. - EquipmentAccounts PayableSalaries Payable45,0005,00050,000100,00020,000120,00020,0009,00023,000180,0001,10043,00012,0001,100177,000Unearned Revenue2,0002,000Interest PayableIncome Taxes PayableNote Payable1,1209,13656,0001,1209,13656,000100,00060,000100,00022,0003,0003,000100,00050,00080,00022,000333,000BondsCommon StockAdditional Pd-in-CapitalRetained Earnings10,00020,000333,000Additional Accounts:SalesCost of Goods SoldBad Debt ExpenseDepreciation Expense - EquipmentDepreciation Exp. - Build.Salaries ExpenseGain330,000330,000198,0007,50023,0005,00026,400198,0007.50023,0005,00026,400200200Interest ExpenseBond Interest ExpenseInsurance ExpenseTreasury StockDividends1,12010,00015,5002,8003,0001,12010,00015,5002,8003,000Revenue2,0002,000Income Tax Expense9,1361,312,656 1,312,656 795,056 795,0569,136

Cash flow statement: It is a statement which reports the cash inflows and outflows of a business…

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Accounting

Prepare a Statement of Cash Flows using the indirect method for the year ended 2020.

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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Question

Prepare a Statement of Cash Flows using the indirect method for the year ended 2020.

Your Name, Inc.
Your Name, Inc.
Post Close Trial Balance
Adjusted Trial Balance
2020 Entries and
Adjustments
Debits Credits
277,200 259,100
1,000
194,000
7,500
198,000
15,500
31-Dec-19
31-Dec-20
DEBITS CREDITS
17.000
2,000
14,000
DEBITS CREDITS
35,100
1,000
150,000
Cash
Marketable Securities
Accounts Rec.
330,000
4,000
180.000
18,000
Allowance for Bad Debt
2,000
5,500
3,000
15,000
5,000
30,000
150,000
Inventory
Prepaid Insurance
7.500
30,000
150,000
Land
Building
Accumulated Dep. - Building
Equipment
Accumulated Dep. - Equipment
Accounts Payable
Salaries Payable
45,000
5,000
50,000
100,000
20,000
120,000
20,000
9,000
23,000
180,000
1,100
43,000
12,000
1,100
177,000
Unearned Revenue
2,000
2,000
Interest Payable
Income Taxes Payable
Note Payable
1,120
9,136
56,000
1,120
9,136
56,000
100,000
60,000
100,000
22,000
3,000
3,000
100,000
50,000
80,000
22,000
333,000
Bonds
Common Stock
Additional Pd-in-Capital
Retained Earnings
10,000
20,000
333,000
Additional Accounts:
Sales
Cost of Goods Sold
Bad Debt Expense
Depreciation Expense - Equipment
Depreciation Exp. - Build.
Salaries Expense
Gain
330,000
330,000
198,000
7,500
23,000
5,000
26,400
198,000
7.500
23,000
5,000
26,400
200
200
Interest Expense
Bond Interest Expense
Insurance Expense
Treasury Stock
Dividends
1,120
10,000
15,500
2,800
3,000
1,120
10,000
15,500
2,800
3,000
Revenue
2,000
2,000
Income Tax Expense
9,136
1,312,656 1,312,656 795,056 795,056
9,136

Definition Definition Net amount of cash that an entity receives and expends over the course of a given period. For a business to continue operating, positive cash flows are required, and they are also necessary to produce value for investors. Investors in particular prefer to see growing cash flows even after capital expenditures have been paid for (which is known as free cash flow).

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