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Prepare the statement of cash flows for the year ended 31 December 2020, using the indirect method.

Prepare the statement of cash flows for the year ended 31 December 2020, using the indirect method.

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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Harold Corporation Income Statement For the Year Ended 31 December 2020 $ 1,083,000 Revenue Cost of goods sold Operating expenses Loss on sale of equipment Тах еxpense 585,000 439,200 2,100 9,450 Net income 47,250 Additional Information a. Depreciation expenses in 2020 was $46,350. b. A company purchased an equipment costing $113,250 by cash. c. An equipment with an original cost of $51,000 (its book value was $30,150) was sold for $28,050 cash. d. Paid $50,000 to settle a note payable. e. Signed a 10-year promissory note of $120,000 in exchange for building. f. A company received cash for all new shares issued in 2020. g. Dividends were declared and paid by cash. Instruction: Prepare the statement of cash flows for the year ended 31 December 2020, using the indirect method.
Transcribed Image Text:Harold Corporation Income Statement For the Year Ended 31 December 2020 $ 1,083,000 Revenue Cost of goods sold Operating expenses Loss on sale of equipment Тах еxpense 585,000 439,200 2,100 9,450 Net income 47,250 Additional Information a. Depreciation expenses in 2020 was $46,350. b. A company purchased an equipment costing $113,250 by cash. c. An equipment with an original cost of $51,000 (its book value was $30,150) was sold for $28,050 cash. d. Paid $50,000 to settle a note payable. e. Signed a 10-year promissory note of $120,000 in exchange for building. f. A company received cash for all new shares issued in 2020. g. Dividends were declared and paid by cash. Instruction: Prepare the statement of cash flows for the year ended 31 December 2020, using the indirect method.
The comparative balance sheets, income statement and additional information of Harold Corporation are presented as follows. Harold Corporation Balance Sheet At 31 December 2020 2019 $ Assets Cash 56,500 71,550 Accounts Receivable 74,100 90,750 Inventory 519,000 490,200 Prepaid Rent Equipment Accumulated Depreciation – Equipment Building Accumulated Depreciation - Building 17,100 19,200 278,250 (108,750) 216,000 (93,000) 90,000 (42,500) 210,000 (52,250) Total Assets 993,950 842,200 Liabilities and Stockholders' Equity Liabilities Accounts Payable Unearned Revenue 181,950 123,450 17,250 11,250 Notes Payable (long-term) 242,500 172,500 Total Liabilities 441,700 307,200 Stockholders' Equity Common Stock Retained Earnings 483,000 450,000 69,250 85,000 Total Stockholders' Equity 552,250 535,500 Total Liabilities and Stockholders' Equity 993,950 842,200
Transcribed Image Text:The comparative balance sheets, income statement and additional information of Harold Corporation are presented as follows. Harold Corporation Balance Sheet At 31 December 2020 2019 $ Assets Cash 56,500 71,550 Accounts Receivable 74,100 90,750 Inventory 519,000 490,200 Prepaid Rent Equipment Accumulated Depreciation – Equipment Building Accumulated Depreciation - Building 17,100 19,200 278,250 (108,750) 216,000 (93,000) 90,000 (42,500) 210,000 (52,250) Total Assets 993,950 842,200 Liabilities and Stockholders' Equity Liabilities Accounts Payable Unearned Revenue 181,950 123,450 17,250 11,250 Notes Payable (long-term) 242,500 172,500 Total Liabilities 441,700 307,200 Stockholders' Equity Common Stock Retained Earnings 483,000 450,000 69,250 85,000 Total Stockholders' Equity 552,250 535,500 Total Liabilities and Stockholders' Equity 993,950 842,200
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