The 2020 comparative balance sheet and 2020 income statement of Maple Group Ltd, have just been prepare and presented to the owners by the company’s Accountant. Upon close examination of the financial information received, it was discovered that some figures in the balance sheet were erroneously omitted due to an oversight by the accountant who is not available to fix the problem due to his unavoidable absence from work. In addition, the owners were concerned about the movement in the company’s cash and cash equivalent given that the balance sheet does not show or explain the reason or reasons why there was an increase or decrease in this area.  The company uses the indirect method to prepare the statement of cash flows and it is expected that this should be able to provide the needed clarity required by the owners.   Maple Group Ltd Comparative Balance Sheet December 31, 2020 and 2019   2020 2019 Increase/(Decrease)         Assets          Cash and cash equivalent        64,990           61,895  ?    Accounts Receivable        95,100           88,500  ?    Inventories        72,500           79,855  ? Fixed Assets, net  ?  ?  ? Total Assets      442,590         395,800                      46,790       Liabilities          Accounts payable        45,000           58,350  ?    Accrued liabilities  ?  ?  ? Long-term notes payable        99,500         128,550  ?       Stockholders' Equity:       Common Stock      143,050         105,110                      37,940 Retained earnings        43,540           24,290                      19,250 Total liabilities and stockholders' equity      442,590         395,800                      46,790         Maple Group Ltd Income Statement Year Ended December 31,2020 Revenues and gains:        Sales revenue      499,000       Interest revenue        11,800         Total revenues and gains           510,800 Expenses        Cost of goods sold      205,500      Depreciation expense        28,500      Other operating expense      126,000       Interest expense        24,300         Total expenses           384,300 Income before income taxes           126,500 Income tax expense             16,300 Net Income           110,200   Notes     Acquisition of fixed asset during 2020             72,950 Sale proceed from sale of plant asset                    -   Receipt for issuance of notes payable                    -   Payment for note payable             29,050 Dividend paid             90,950 Book value of equipment sold                    -     Requirements How can the owners use the cash flow information or what can the statement of cash flows helps the owners to do?   Reconstruct the company’s comparative balance sheet for 2019/2020 using the information and compute and show the missing figures to include the appropriate sign as a positive or negative figure.   Prepare a complete statement of cash flows for 2020 using the indirect method using the information

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
icon
Related questions
icon
Concept explainers
Topic Video
Question

The 2020 comparative balance sheet and 2020 income statement of Maple Group Ltd, have just been prepare and presented to the owners by the company’s Accountant. Upon close examination of the financial information received, it was discovered that some figures in the balance sheet were erroneously omitted due to an oversight by the accountant who is not available to fix the problem due to his unavoidable absence from work. In addition, the owners were concerned about the movement in the company’s cash and cash equivalent given that the balance sheet does not show or explain the reason or reasons why there was an increase or decrease in this area.  The company uses the indirect method to prepare the statement of cash flows and it is expected that this should be able to provide the needed clarity required by the owners.

 

Maple Group Ltd

Comparative Balance Sheet

December 31, 2020 and 2019

 

2020

2019

Increase/(Decrease)

        Assets

 

 

 

   Cash and cash equivalent

       64,990

          61,895

 ?

   Accounts Receivable

       95,100

          88,500

 ?

   Inventories

       72,500

          79,855

 ?

Fixed Assets, net

 ?

 ?

 ?

Total Assets

     442,590

        395,800

                     46,790

      Liabilities

 

 

 

   Accounts payable

       45,000

          58,350

 ?

   Accrued liabilities

 ?

 ?

 ?

Long-term notes payable

       99,500

        128,550

 ?

      Stockholders' Equity:

 

 

 

Common Stock

     143,050

        105,110

                     37,940

Retained earnings

       43,540

          24,290

                     19,250

Total liabilities and stockholders' equity

     442,590

        395,800

                     46,790

 

     

Maple Group Ltd

Income Statement

Year Ended December 31,2020

Revenues and gains:

 

 

   Sales revenue

     499,000

 

    Interest revenue

       11,800

 

      Total revenues and gains

 

        510,800

Expenses

 

 

   Cost of goods sold

     205,500

 

   Depreciation expense

       28,500

 

   Other operating expense

     126,000

 

    Interest expense

       24,300

 

      Total expenses

 

        384,300

Income before income taxes

 

        126,500

Income tax expense

 

          16,300

Net Income

 

        110,200

 

Notes

 

 

Acquisition of fixed asset during 2020

 

          72,950

Sale proceed from sale of plant asset

 

                 -  

Receipt for issuance of notes payable

 

                 -  

Payment for note payable

 

          29,050

Dividend paid

 

          90,950

Book value of equipment sold

 

                 -  

 

Requirements

  1. How can the owners use the cash flow information or what can the statement of cash flows helps the owners to do?

 

  1. Reconstruct the company’s comparative balance sheet for 2019/2020 using the information and compute and show the missing figures to include the appropriate sign as a positive or negative figure.

 

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

 

Expert Solution
steps

Step by step

Solved in 4 steps with 4 images

Blurred answer
Knowledge Booster
Financial Statements
Learn more about
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.
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education