Prepare statment of cash flows using indirect method.
Transcribed Image Text:Accumulated depreciation
Total assets
Liabilities and Equity
Accounts payable (all relate to inventory purchases)
Accrued wages payable
Common stock
Retained earnings
Total liabilities and equity
Runner Company
Income Statement
For the Year Ended December 31, 2020
$39,200
(12,544 )
Sales
Less cost of goods sold
Gross margin
Less wage expense
Less other operating expenses
Less depreciation expense
Net income (loss)
26,656
(10,192)
(1,176)
(3,180)
$12,108
(7.494 )
$82,692
$14.736
1,566
37,000
29,390
$82,692
(7,389 )
$60,778
$5,385
1,111
37,000
17,282
$60,778
In 2020, Runner purchased equipment for $27,250 and sold some equipment for its book value (i.e., no gain or loss resulted).
Transcribed Image Text:The following financial statements were furnished by the Runner Company:
Assets
Cash
Runner Company
Balance Sheets
As of December 31, 2019, and 2020
Accounts receivable
Inventory
Prepaid expenses
Plant and equipment
Accumulated depreciation
Total assets
Liabilities and Equity
Accounts payable (all relate to inventory purchases)
Accrued wages payable
Common stock
2020
$15,780
5,874
9,511
2,531
56,490
(7,494 )
$82,692
$14,736
1,566
37,000
2019
$14,170
5.297
8,082
1,379
39,239
(7.389 )
$60,778
$5,385
1,111
37,000
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).
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
