The 2021 comparative balance sheet and income statement of Auga Company Ltd, have just been distributed at a meeting of the company’s board of directors. The members of the board of directors were desirous of knowing the reason or reasons why the cash balance different from the net income. 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 directors. The directors have asked each student from your accounting course to assist with the needed clarification and have put forward the attached financial information. Notes Acquisition of plant asset during 2021 600,900 Sale proceeds from sale of plant asset 356,000 Receipt for issuance of notes payable 384,900 Payment for note payable 450,000 Dividend paid 148,500 Book value of equipment sold 240,500 1. Requirements A. Reconstruct the company’s comparative balance sheet for 2020/2021 using the information and compute and show the missing figures to include the appropriate sign as a positive or negative figure. B. Prepare a complete statement of cash flows for 2021 using the indirect method.
Scenario:
The 2021 comparative
The directors have asked each student from your accounting course to assist with the needed clarification and have put forward the attached financial information.
Notes |
||
Acquisition of plant asset during 2021 |
600,900 |
|
Sale proceeds from sale of plant asset |
356,000 |
|
Receipt for issuance of notes payable |
384,900 |
|
Payment for note payable |
450,000 |
|
Dividend paid |
148,500 |
|
Book value of equipment sold |
240,500 |
1. Requirements
A. Reconstruct the company’s comparative balance sheet for 2020/2021 using the information and compute and show the missing figures to include the appropriate sign as a positive or negative figure.
B. Prepare a complete statement of cash flows for 2021 using the indirect method.
![Auga Company Ltd.
Income Statement
Year Ended December 31,2021
Revenues and gains:
Sales revenue
2,224,000
115,500
Gain on sale of plant assets
Total revenues and gains
Expenses
Cost of goods sold
Depreciation expense
Other operating expense
Total expenses
2,339,500
1,305,000
165,400
405,400
1,875,800
463,700
265,000
198,700
Income before income taxes
Income tax expense
Net Income](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F7ec5e8f3-2a53-43b0-8d2f-47385ab4e60b%2F4195d289-4a12-4d12-8713-3eee9302d9af%2Ffah8tlbs_processed.png&w=3840&q=75)
![Auga Company Ltd.
Comparative Balance Sheet
December 31, 2020 and 2021
2021
2020 Increase/(Decrease)
Assets
Cash
238,000
303,200
358,300
35,350
205,000
1,105,000
2,244,850
215,200
259,300
348,200
43,100
205,000
910,000
1,980,800
?
Accounts Receivable
?
Inventories
?
Prepaid expenses
Intangible assets
Plant assets, net
?
?
?
Total Assets
Liabilities
Accounts payable
254,300
415,300
115,000
845,400
240,000
410,000
135,400
910,500
?
Accrued liabilities
?
Income tax payable
Long-term notes payable
Stockholders' Equity
?
295,500
345,600
Common Stock
275,300
295,400
?
Retained earnings
Treasury stock
Total liabilities and stockholders' equity
(26,250)
2,244,850
(285,800)
1,980,800](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F7ec5e8f3-2a53-43b0-8d2f-47385ab4e60b%2F4195d289-4a12-4d12-8713-3eee9302d9af%2Flvqjw4_processed.png&w=3840&q=75)
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