ulation is attached in as image" Changes in the company's balance sheet accounts over the year are summarized as follows: 1. Accounts receivable decreased by $85,000. 2. Accrued Interest Receivable increased by $15,000. 3. Inventory decreased by $280,000. 4. Accounts payable related to suppliers of merchandise decreased by $240,000. 5. Short-term prepayments of operating expenses decreased by $18,000. 6. Accrued liabilities for operating expenses
ulation is attached in as image" Changes in the company's balance sheet accounts over the year are summarized as follows: 1. Accounts receivable decreased by $85,000. 2. Accrued Interest Receivable increased by $15,000. 3. Inventory decreased by $280,000. 4. Accounts payable related to suppliers of merchandise decreased by $240,000. 5. Short-term prepayments of operating expenses decreased by $18,000. 6. Accrued liabilities for operating expenses
ulation is attached in as image" Changes in the company's balance sheet accounts over the year are summarized as follows: 1. Accounts receivable decreased by $85,000. 2. Accrued Interest Receivable increased by $15,000. 3. Inventory decreased by $280,000. 4. Accounts payable related to suppliers of merchandise decreased by $240,000. 5. Short-term prepayments of operating expenses decreased by $18,000. 6. Accrued liabilities for operating expenses
You are the chief accountant for Bengal Products Inc. Your junior accountant has prepared an income statement for the current year and prepared the following additional information by analyzing changes in the company's balance sheet accounts.
"Calculation is attached in as image"
Changes in the company's balance sheet accounts over the year are summarized as follows: 1. Accounts receivable decreased by $85,000. 2. Accrued Interest Receivable increased by $15,000. 3. Inventory decreased by $280,000. 4. Accounts payable related to suppliers of merchandise decreased by $240,000. 5. Short-term prepayments of operating expenses decreased by $18,000. 6. Accrued liabilities for operating expenses increased by $35,000. 7. Liability for accrued interest payable decreased by $16,000. 8. Liability for accrued income taxes payable increased by $25,000. 9. As an investment, $120,000 of marketable securities were purchased during the year. 10. Marketable securities with a book value of $210,000 were sold. 11. $250,000 was invested as a loan to another company. 12. $190,000 of loans given before were collected. 13. $3,800,000 of plant assets were purchased for cash. 14. Plant assets with a book value of $360,000 were sold during the year. 15. $740,000 were borrowed as notes payable (long term). 16. $620,000 of notes payable (long term) were paid during the year. 17. Bonds payable issued during the year was $1,100,000. 18. $890,000 of capital stock was issued during the year. 19. Retained earnings at the beginning of the year was $1,500,000 and at the end of the year was $1,810,000. 20. Dividend was declared and paid in cash during the year. 20. Cash balance at the beginning of the year was $448,000 and at the end of the year was $330,000. 21. All investing and financing activities were cash transactions.
Your task: Prepare a complete statement of cash flows for Bengal Products Inc. for the year 2020 using the direct method and show the reconciliation of cash flow from operating activities using the indirect method.
Transcribed Image Text:You are the chief accoutant for Bengal Products Inc. Your junior accountant has prepared an income
statement for the current year and prepared the following additional information by analyzing changes
in the company's balance sheet accounts.
Bengal Products Inc.
Income Statement
For the year ended December 31, 2020
Revenue:
9,500,000
320,000
Net Sales
Interest Inoome
Gain on Sales of Marketable Securities
70,000
$ 9,890,000
Total revenue and gains
Costs and expenses:
Cost of goods sold
Operating expenses
(Including depreciation of 700,000)
Interest expense
$4,860,000
$3,740,000
$ 270,000
$ 300,000
90,000
Income tax expenses
Loss on sales of plant assets
Total costs, expenses and losses
$ 9,260,000
Net Income
630,000
Changes in the company's balance sheet accounts over the year are summarized as follows:
1. Accounts receivable decreased by $85,000.
2. Accrued Interest Receivable increased by $15,000.
3. Inventory decreased by $280,000.
4. Accounts payable related to suppliers of merchandise decreased by $240,000.
5. Short-term prepayments of operating expenses decreased by $18,000.
6. Accrued liabilities for operating expenses increased by $35,000.
7. Liability for accrued interest payable decreased by $16,000.
8. Liability for accrued income taxes payable increased by $25,000.
9. As an investment, $120,000 of marketable securities were purchased during the year.
10. Marketable securities with a book value of $210,000 were sold.
11. $250,000 was invested as a loan to another company.
12. $190,000 of loan given before were collected.
13. $3,800,000 of plant assets were purchased for cash.
14. Plant assets with a book value of $360,000 were sold during the year.
15. $740,000 were borrowed as notes payable (long term).
16. $620,000 of notes payable (long term) were paid during the year.
17. Bonds payable issued during the year was $1,100,000.
18. $890,000 of capital stock was issued during the year.
19. Retained earnings at the beginning of the year was $1,500,000 and at the end of year was
$1,810,000.
20. Dividend was declared and paid in cash during the year.
20. Cash balance at the beginning of the year was $448,000 and at the end of the year was $330,000.
21. All investing and financing activities were cash transactions.
Your task:
Prepare a complete statement of cash flows for Bengal Products Inc. for the year 2020 using the direct
method and show the reconcillation of cash flow from operating activities using the indirect method.
Definition Definition Money that the business will be receiving from its clients who have utilized the credit provided to buy its goods and services. The credit period typically lasts for a short term, lasting from a few days, a few months, to a year.
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