Use the following financial statements and additional information to prepare a statement of cash flows for the year ended December 31, 2020 using the indirect method. Kris Kringle, Inc. Balance Sheets At December 31 2020 2019 Assets: Cash $174,525 $65,200 Accounts receivable, net 52,850 56,750 Merchandise inventory 167,750 144,850 Prepaid expenses 16,080 12,680 Equipment 290,600 245,600 Accumulated depreciation-Equipment (80,600) (97,600) Total assets $621,205 $427,480 Liabilities: Accounts payable $55,270 $45,450 Income taxes payable 10,320 12,240 Notes payable (long term) 59,200 79,200 Total liabilities $124,790 $136,890 Equity: Common stock 200,000 150,000 Paid-in capital in excess of par 53,000 40,000 Retained earnings 243,415 100,590 Total equity $426,415 $290,590 Total liabilities and equity $621,205 $427,480 Kris Kringle, Inc. Income Statement For Year Ended December 31, 2020 Sales $488,000 Cost of goods sold $222,540 Depreciation expense 25,000 Other operating expenses 106,260 Interest expense 6,400 (360,200) Other gains (losses): Gain on sale of equipment 2,850 Income before taxes 130,650 Income taxes expense 30,525 Net income $100,125 Additional Information a. Cash dividends declared and paid were $55,000. b. New equipment is purchased for $150,000 cash. c. Received $49,550 cash for the sale of equipment. d. Issued new shares of stock receiving $157,000 cash.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question 21

Use the following financial statements and additional information to prepare a statement of cash flows for the year ended December 31, 2020 using the indirect method.

Kris Kringle, Inc. Balance Sheets At December 31
	2020	2019
Assets:
Cash	$174,525	$65,200
Accounts receivable, net	52,850	56,750
Merchandise inventory	167,750	144,850
Prepaid expenses	16,080	12,680
Equipment	290,600	245,600
Accumulated depreciation-Equipment	(80,600)	(97,600)
Total assets	$621,205	$427,480
Liabilities:
Accounts payable	$55,270	$45,450
Income taxes payable	10,320	12,240
Notes payable (long term)	59,200	79,200
Total liabilities	$124,790	$136,890
Equity:
Common stock	200,000	150,000
Paid-in capital in excess of par	53,000	40,000
Retained earnings	243,415	100,590
Total equity	$426,415	$290,590
Total liabilities and equity	$621,205	$427,480

Kris Kringle, Inc. Income Statement For Year Ended December 31, 2020
Sales		$488,000
Cost of goods sold	$222,540
Depreciation expense	25,000
Other operating expenses	106,260
Interest expense	6,400	(360,200)
Other gains (losses):
Gain on sale of equipment		2,850
Income before taxes		130,650
Income taxes expense		30,525
Net income		$100,125

Additional Information

a. Cash dividends declared and paid were $55,000.
b. New equipment is purchased for $150,000 cash.
c. Received $49,550 cash for the sale of equipment.

d. Issued new shares of stock receiving $157,000 cash.

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