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Required: 1. Prepare a statement of cash flows for 2020 using the indirect method. 2. Compute the following 2 ratios for 2020: InventoryTurnover and Payout Ratio

Required: 1. Prepare a statement of cash flows for 2020 using the indirect method. 2. Compute the following 2 ratios for 2020: InventoryTurnover and Payout Ratio

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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Required:

1. Prepare a statement of cash flows for 2020 using the indirect method.

2. Compute the following 2 ratios for 2020: InventoryTurnover and Payout Ratio

Roger Corporation Comparative Balance Sheets for 2019 & 20 2020 2019 Assets Cash Tk. 16,500 Tk. 57,400 Accounts Receivable 90,000 58,000 Inventory 110,000 70,000 Prepaid Expenses 25,500 32,000 Investments (Long Term) 175,000 120,000 Equipment 225,000 200,000 Accumulated Depreciation (45,000) (50,000) Total Assets Tk. 597,000 Tk. 487,400 Liabilities and Stockholders' Equity Accounts Payable Tk. 69,800 Tk. 47,000 Salaries Payable 18,200 26,900 Bonds Payable 196,000 142,000 Total Liabilities 284,000 215,900 Common Stock 39,000 51,000 Retained Earnings 274,000 220,500 Total Stockholders' Equity Total Liabilities and Stockholders' Equity 313,000 271,500 Tk. 597,000 Tk. 487,400
Transcribed Image Text:Roger Corporation Comparative Balance Sheets for 2019 & 20 2020 2019 Assets Cash Tk. 16,500 Tk. 57,400 Accounts Receivable 90,000 58,000 Inventory 110,000 70,000 Prepaid Expenses 25,500 32,000 Investments (Long Term) 175,000 120,000 Equipment 225,000 200,000 Accumulated Depreciation (45,000) (50,000) Total Assets Tk. 597,000 Tk. 487,400 Liabilities and Stockholders' Equity Accounts Payable Tk. 69,800 Tk. 47,000 Salaries Payable 18,200 26,900 Bonds Payable 196,000 142,000 Total Liabilities 284,000 215,900 Common Stock 39,000 51,000 Retained Earnings 274,000 220,500 Total Stockholders' Equity Total Liabilities and Stockholders' Equity 313,000 271,500 Tk. 597,000 Tk. 487,400
Roger Corporation Income Statement For the year ended December 31, 2020 Tk. Net Sales 800,000 Cost Of Goods Sold (350,000) Gross Profit 450,000 Expenses (180,000) Income Before Income Taxes and Interest Expense 270,000 Interest Expense (50,000) Income Before Income Taxes 220,000 Income Tax Expense (160,000) Net Income 60,000 Additional data: 1. New equipment costing Tk. 80,000 was purchased for cash during the year. 2. Old equipment costing Tk. 55,000 with a book value of Tk. 27,500 was sold for Tk. 12,500 cash. 3. Cash dividends of Tk. 19,000 were declared and paid. 4. Depreciation expense of Tk. 35,000 is included in the operating expenses.
Transcribed Image Text:Roger Corporation Income Statement For the year ended December 31, 2020 Tk. Net Sales 800,000 Cost Of Goods Sold (350,000) Gross Profit 450,000 Expenses (180,000) Income Before Income Taxes and Interest Expense 270,000 Interest Expense (50,000) Income Before Income Taxes 220,000 Income Tax Expense (160,000) Net Income 60,000 Additional data: 1. New equipment costing Tk. 80,000 was purchased for cash during the year. 2. Old equipment costing Tk. 55,000 with a book value of Tk. 27,500 was sold for Tk. 12,500 cash. 3. Cash dividends of Tk. 19,000 were declared and paid. 4. Depreciation expense of Tk. 35,000 is included in the operating expenses.
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