The comparative unclassified statement of financial position for Sheridan Ltd. follows: Assets Cash Term deposits (maturing in 60 days) Additional information pertaining to 2024: 1. 2. 3. Sheridan Ltd. Statement of Financial Position December 31 5. 6. 7. Accounts receivable Inventory Estimated inventory returns Long-term investments Equipment Accumulated depreciation Total assets Liabilities and Shareholders' Equity Accounts payable $22,000 $45,000 Refund liability 10,000 3,000 Bank loan payable (non-current) 165,000 171,500 Common shares 201,000 180,000 Retained earnings 201,000 136,000 Total liabilities and shareholders' equity $599,000 $535,500 8. 9. 10. 11. 2024 $50,400 4,600 90,000 178,000 Net income was $80,000. Sales were $972,000. Cost of goods sold was $756,000. 2023 $24,100 900 78,500 185,000 3,000 79,000 100,000 270,000 174,000 (79,000) (30,000) $599,000 $535,500 6,000 Operating expenses were $49,000, exclusive of depreciation expense. Depreciation expense was $49,000. Interest expense was $14,000. Income tax expense was $30,000. Long-term investments were sold at a gain of $6,000. These investments are carried at their cost, so gains and losses on these investments are recorded only when the investments are sold. No equipment was sold during the year. $6,500 of the bank loan was repaid during the year. Common shares were issued for $21,000.
The comparative unclassified statement of financial position for Sheridan Ltd. follows: Assets Cash Term deposits (maturing in 60 days) Additional information pertaining to 2024: 1. 2. 3. Sheridan Ltd. Statement of Financial Position December 31 5. 6. 7. Accounts receivable Inventory Estimated inventory returns Long-term investments Equipment Accumulated depreciation Total assets Liabilities and Shareholders' Equity Accounts payable $22,000 $45,000 Refund liability 10,000 3,000 Bank loan payable (non-current) 165,000 171,500 Common shares 201,000 180,000 Retained earnings 201,000 136,000 Total liabilities and shareholders' equity $599,000 $535,500 8. 9. 10. 11. 2024 $50,400 4,600 90,000 178,000 Net income was $80,000. Sales were $972,000. Cost of goods sold was $756,000. 2023 $24,100 900 78,500 185,000 3,000 79,000 100,000 270,000 174,000 (79,000) (30,000) $599,000 $535,500 6,000 Operating expenses were $49,000, exclusive of depreciation expense. Depreciation expense was $49,000. Interest expense was $14,000. Income tax expense was $30,000. Long-term investments were sold at a gain of $6,000. These investments are carried at their cost, so gains and losses on these investments are recorded only when the investments are sold. No equipment was sold during the year. $6,500 of the bank loan was repaid during the year. Common shares were issued for $21,000.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question

Transcribed Image Text:The comparative unclassified statement of financial position for Sheridan Ltd. follows:
Assets
Cash
Term deposits (maturing in 60 days)
Accounts receivable
Inventory
Estimated inventory returns
Long-term investments
Equipment
Accumulated depreciation
Total assets
Liabilities and Shareholders' Equity
Accounts payable
Refund liability
Bank loan payable (non-current)
Common shares
Retained earnings
Total liabilities and shareholders' equity $599,000
Additional information pertaining to 2024:
1.
2.
3.
5.
6.
7.
8.
9.
Sheridan Ltd.
Statement of Financial Position
December 31
10.
11.
2024
$50,400
4,600
Interest expense was $14,000.
Income tax expense was $30,000.
90,000
178,000
6,000
79,000
270,000
(79,000)
$599,000
$22,000
10,000
165,000
201,000
201,000
2023
$24,100
900
78,500
185,000
No equipment was sold during the year.
$6,500 of the bank loan was repaid during the year.
Common shares were issued for $21,000.
3,000
100,000
174,000
(30,000)
$535,500
$45,000
3,000
171,500
180,000
136,000
$535,500
Net income was $80,000.
Sales were $972,000.
Cost of goods sold was $756,000.
Operating expenses were $49,000, exclusive of depreciation expense.
Depreciation expense was $49.000.
Long-term investments were sold at a gain of $6,000. These investments are carried at their cost, so gains and losses on
these investments are recorded only when the investments are sold.

Transcribed Image Text:Prepare a statement of cash flows using the Indirect method. (Show amounts that decrease cash flow with either a-sign eg -45,000,
or in parenthesis ex(45,0001)
SHERIDAN LTD.
Statement of Cash Flows-Indirect Method
Adjustments to reconcile net income to
<<
$
$
$
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