The comparative balance sheet of Gus Company at December 31, 2021 and 2020 appears below: Assets: 12/31/2021 12/31/2020 Cash $ 53,000 $ 120,000 Accounts receivable (net) 37,000 48,000 Inventories 108,500 100,000 Equipment 573,200 450,000 Accumulated depreciation-equipment (142,000) (176,000) $629,700 $542,000 Liabilities & Stockholders Equity: Accounts payable $ 62,500 $ 43,800 Bonds payable, due June 2021 0 100,000 Common stock, $10 par 335,000 285,000 Paid-in capital in excess of par - Common stock 74,000 55,000 Retained earnings 158,200 58,200 $629,700 $542,000 The income statement for the year ended December 31, 2021 appears below: Sales $625,700 Cost of merchandise sold 340,000 Gross profit 285,700 Operating expenses (includes $26,000 depreciation expense) 94,000 Operating Income 191,700 Interest expense 6,000 Income before income tax 185,700 Income tax 60,700 Net income $125,000 Also in 2021, fully depreciated equipment costing $60,000 was scrapped at no salvage value and 5,000 shares of common stock were issued for cash. Cash flows from financing activities for the year ended December 31, 2021 are? Group of answer choices negative $31,000 positive $44,000 negative $56,000 negative $100,000
The comparative
|
Assets: |
12/31/2021 |
12/31/2020 |
|
Cash |
$ 53,000 |
$ 120,000 |
|
|
37,000 |
48,000 |
|
Inventories |
108,500 |
100,000 |
|
Equipment |
573,200 |
450,000 |
|
|
(142,000) |
(176,000) |
|
|
$629,700 |
$542,000 |
|
Liabilities & |
|
|
|
Accounts payable |
$ 62,500 |
$ 43,800 |
|
Bonds payable, due June 2021 |
0 |
100,000 |
|
Common stock, $10 par |
335,000 |
285,000 |
|
Paid-in capital in excess of par - Common stock |
74,000 |
55,000 |
|
|
158,200 |
58,200 |
|
|
$629,700 |
$542,000 |
The income statement for the year ended December 31, 2021 appears below:
|
Sales |
|
$625,700 |
|
Cost of merchandise sold |
|
340,000 |
|
Gross profit |
|
285,700 |
|
Operating expenses (includes $26,000 depreciation expense) |
|
94,000 |
|
Operating Income |
|
191,700 |
|
Interest expense |
|
6,000 |
|
Income before income tax |
|
185,700 |
|
Income tax |
|
60,700 |
|
Net income |
|
$125,000 |
Also in 2021, fully depreciated equipment costing $60,000 was scrapped at no salvage value and 5,000 shares of common stock were issued for cash.
Cash flows from financing activities is an important section of cash flows statement which shows all cash inflows and cash outflows related to the sources and application of funds. Long term debt, shares, bank loan comes under this.
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