The condensed income statement and comparative balance sheet of Donald Corporation as of December 31, 2022 and 2021, are provided below. Other financial data is also given. DONALD CORPORATION Condensed Income Statement Year Ended December 31, 2022 Revenues $ 671,500 Costs and Expenses Cost of Goods Sold 428,600 Salaries Expense 124,600 Depreciation Expense 14,600 Advertising Expense 14,500 Utilities Expense 17,600 Total Costs and Expenses $ 599,900 Net Income Before Income Taxes 71,600 Income Taxes Expense 17,900 Net Income After Income Taxes $ 53,700 DONALD CORPORATION Comparative Balance Sheet December 31, 2022 and 2021 Assets 2022 2021 Cash $ 72,600 $ 67,000 Accounts Receivable (Net) 55,050 51,600 Merchandise Inventory 48,600 53,400 Prepaid Advertising 7,600 9,400 Property, Plant, and Equipment 120,000 96,000 Less: Accumulated Depreciation (24,200 ) (9,600 ) Total Assets $ 279,650 $ 267,800 Liabilities and Stockholders’ Equity Liabilities Accounts Payable 50,050 78,400 Salaries Payable 5,900 3,300 Unearned Revenues 3,800 6,400 Income Taxes Payable 8,100 4,600 Note Payable—2024 0 26,000 Total Liabilities $ 67,850 $ 118,700 Stockholders’ Equity Common Stock ($2 par) 67,000 46,000 Retained Earnings 144,800 103,100 Total Stockholders’ Equity $ 211,800 $ 149,100 Total Liabilities and Stockholders’ Equity $ 279,650 $ 267,800 Additional information for the year that is pertinent to its preparation follows. No items of property, plant, and equipment were disposed of during the year. Paid cash for the additions to property, plant, and equipment during the year. Paid $12,000 dividends on the common stock in cash during the year. Issued common stock at par value for cash. Paid cash to retire the long-term note payable. Required: Prepare a statement of cash flows for Donald Corporation for 2022. Analyze: If Donald Corporation had written off an uncollectible account receivable of $5,900 during this fiscal period, what adjustment, if any, would be required on the statement of cash flows?

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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The condensed income statement and comparative balance sheet of Donald Corporation as of December 31, 2022 and 2021, are provided below. Other financial data is also given.
 

DONALD CORPORATION
Condensed Income Statement
Year Ended December 31, 2022
Revenues $ 671,500  
Costs and Expenses      
Cost of Goods Sold   428,600  
Salaries Expense   124,600  
Depreciation Expense   14,600  
Advertising Expense   14,500  
Utilities Expense   17,600  
Total Costs and Expenses $ 599,900  
Net Income Before Income Taxes   71,600  
Income Taxes Expense   17,900  
Net Income After Income Taxes $ 53,700  
 

 

DONALD CORPORATION
Comparative Balance Sheet
December 31, 2022 and 2021
Assets   2022       2021    
Cash $ 72,600     $ 67,000    
Accounts Receivable (Net)   55,050       51,600    
Merchandise Inventory   48,600       53,400    
Prepaid Advertising   7,600       9,400    
Property, Plant, and Equipment   120,000       96,000    
Less: Accumulated Depreciation   (24,200 )     (9,600 )  
Total Assets $ 279,650     $ 267,800    
Liabilities and Stockholders’ Equity                
Liabilities                
Accounts Payable   50,050       78,400    
Salaries Payable   5,900       3,300    
Unearned Revenues   3,800       6,400    
Income Taxes Payable   8,100       4,600    
Note Payable—2024   0       26,000    
Total Liabilities $ 67,850     $ 118,700    
Stockholders’ Equity                
Common Stock ($2 par)   67,000       46,000    
Retained Earnings   144,800       103,100    
Total Stockholders’ Equity $ 211,800     $ 149,100    
Total Liabilities and Stockholders’ Equity $ 279,650     $ 267,800    
 

 

Additional information for the year that is pertinent to its preparation follows.
 

  1. No items of property, plant, and equipment were disposed of during the year.
  2. Paid cash for the additions to property, plant, and equipment during the year.
  3. Paid $12,000 dividends on the common stock in cash during the year.
  4. Issued common stock at par value for cash.
  5. Paid cash to retire the long-term note payable.

 

Required:

Prepare a statement of cash flows for Donald Corporation for 2022.


Analyze:

If Donald Corporation had written off an uncollectible account receivable of $5,900 during this fiscal period, what adjustment, if any, would be required on the statement of cash flows?

 

Cash flows from financing activities
%24
24
Transcribed Image Text:Cash flows from financing activities %24 24
DONALD CORPORATION
Statement of Cash Flows
Year Ended December 31, 2022
Cash flows from operating activities
Adjustments:
Total adjustments
$
Cash flows from investing activities
$
Transcribed Image Text:DONALD CORPORATION Statement of Cash Flows Year Ended December 31, 2022 Cash flows from operating activities Adjustments: Total adjustments $ Cash flows from investing activities $
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