Sandhill Company had the following information available at the end of 2020. SANDHILLCOMPANY COMPARATIVE BALANCE SHEETS AS OF DECEMBER 31, 2020 AND 2019 2020 2019 Cash $10,100 $4,020 Accounts receivable 20,580 12,830 Short-term investments 22,020 29,750 Inventory 42,390 34,710 Prepaid rent 3,020 12,030 Prepaid insurance 2,100 89 Supplies 1,000 74 Land 125,640 176,140 Buildings 347,130 347,130 Accumulated depreciation—buildings (104,250 ) (87,940 ) Equipment 530,080 398,810 Accumulated depreciation—equipment (130,600 ) (111,650 ) Patents 44,570 49,920 Total assets $913,780 $865,913 Accounts payable $22,110 $32,240 Income taxes payable 5,010 4,010 Salaries and wages payable 5,000 2,990 Short-term notes payable 10,010 10,010 Long-term notes payable 59,650 70,450 Bonds payable 402,050 402,050 Premium on bonds payable 19,870 21,533 Common stock 241,660 220,690 Paid-in capital in excess of par—common stock 24,940 17,540 Retained earnings 123,480 84,400 Total liabilities and stockholders’ equity $913,780 $865,913 SANDHILL COMPANY INCOME STATEMENT AND DIVIDEND INFORMATION FOR THE YEAR ENDED DECEMBER 31, 2020 Sales revenue $1,161,810 Cost of goods sold 753,770 408,040 Gross margin Operating expenses Selling expenses $79,370 Administrative expenses 150,640 Depreciation/Amortization expense 40,610 Total operating expenses 270,620 Income from operations 137,420 Other revenues/expenses Gain on sale of land 7,980 Gain on sale of short-term investment 4,040 Dividend revenue 2,410 Interest expense (51,610 ) (37,180 ) Income before taxes 100,240 Income tax expense 39,060 Net income 61,180 Dividends to common stockholders (22,100 ) To retained earnings $39,080 Prepare a statement of cash flows for Sandhill Company using the direct method accompanied by a reconciliation schedule. Assume the short-term investments are debt securities, classified as available-for-sale.

Sandhill Company had the following information available at the end of 2020. SANDHILLCOMPANY COMPARATIVE BALANCE SHEETS AS OF DECEMBER 31, 2020 AND 2019 2020 2019 Cash $10,100 $4,020 Accounts receivable 20,580 12,830 Short-term investments 22,020 29,750 Inventory 42,390 34,710 Prepaid rent 3,020 12,030 Prepaid insurance 2,100 89 Supplies 1,000 74 Land 125,640 176,140 Buildings 347,130 347,130 Accumulated depreciation—buildings (104,250 ) (87,940 ) Equipment 530,080 398,810 Accumulated depreciation—equipment (130,600 ) (111,650 ) Patents 44,570 49,920 Total assets $913,780 $865,913 Accounts payable $22,110 $32,240 Income taxes payable 5,010 4,010 Salaries and wages payable 5,000 2,990 Short-term notes payable 10,010 10,010 Long-term notes payable 59,650 70,450 Bonds payable 402,050 402,050 Premium on bonds payable 19,870 21,533 Common stock 241,660 220,690 Paid-in capital in excess of par—common stock 24,940 17,540 Retained earnings 123,480 84,400 Total liabilities and stockholders’ equity $913,780 $865,913 SANDHILL COMPANY INCOME STATEMENT AND DIVIDEND INFORMATION FOR THE YEAR ENDED DECEMBER 31, 2020 Sales revenue $1,161,810 Cost of goods sold 753,770 408,040 Gross margin Operating expenses Selling expenses $79,370 Administrative expenses 150,640 Depreciation/Amortization expense 40,610 Total operating expenses 270,620 Income from operations 137,420 Other revenues/expenses Gain on sale of land 7,980 Gain on sale of short-term investment 4,040 Dividend revenue 2,410 Interest expense (51,610 ) (37,180 ) Income before taxes 100,240 Income tax expense 39,060 Net income 61,180 Dividends to common stockholders (22,100 ) To retained earnings $39,080 Prepare a statement of cash flows for Sandhill Company using the direct method accompanied by a reconciliation schedule. Assume the short-term investments are debt securities, classified as available-for-sale.

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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Sandhill Company had the following information available at the end of 2020.

SANDHILLCOMPANY COMPARATIVE BALANCE SHEETS AS OF DECEMBER 31, 2020 AND 2019
	2020		2019
Cash	$10,100			$4,020
Accounts receivable	20,580			12,830
Short-term investments	22,020			29,750
Inventory	42,390			34,710
Prepaid rent	3,020			12,030
Prepaid insurance	2,100			89
Supplies	1,000			74
Land	125,640			176,140
Buildings	347,130			347,130
Accumulated depreciation—buildings	(104,250	)		(87,940	)
Equipment	530,080			398,810
Accumulated depreciation—equipment	(130,600	)		(111,650	)
Patents	44,570			49,920
Total assets	$913,780			$865,913

Accounts payable	$22,110			$32,240
Income taxes payable	5,010			4,010
Salaries and wages payable	5,000			2,990
Short-term notes payable	10,010			10,010
Long-term notes payable	59,650			70,450
Bonds payable	402,050			402,050
Premium on bonds payable	19,870			21,533
Common stock	241,660			220,690
Paid-in capital in excess of par—common stock	24,940			17,540
Retained earnings	123,480			84,400
Total liabilities and stockholders’ equity	$913,780			$865,913

SANDHILL COMPANY INCOME STATEMENT AND DIVIDEND INFORMATION FOR THE YEAR ENDED DECEMBER 31, 2020
Sales revenue			$1,161,810
Cost of goods sold			753,770
			408,040

Gross margin
Operating expenses
Selling expenses	$79,370
Administrative expenses	150,640
Depreciation/Amortization expense	40,610
Total operating expenses			270,620
Income from operations			137,420
Other revenues/expenses
Gain on sale of land	7,980
Gain on sale of short-term investment	4,040
Dividend revenue	2,410
Interest expense	(51,610	)	(37,180	)
Income before taxes			100,240
Income tax expense			39,060
Net income			61,180
Dividends to common stockholders			(22,100	)
To retained earnings			$39,080

Prepare a statement of cash flows for Sandhill Company using the direct method accompanied by a reconciliation schedule. Assume the short-term investments are debt securities, classified as available-for-sale.

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