Waterway Company has not yet prepared a statement of cash flows for the 2020 fiscal year. Comparative balance sheets as of December 31, 2019 and 2020, and a statement of income and retained earnings for the year ended December 31, 2020, are presented as follows. WATERWAY COMPANY STATEMENT OF INCOME AND RETAINED EARNINGS FOR THE YEAR ENDED DECEMBER 31, 2020 ($000 OMITTED) Sales revenue $3,830 Expenses Cost of goods sold $1,190 Salaries and benefits 740 Heat, light, and power 70 Depreciation 80 Property taxes 20 Patent amortization 20 Miscellaneous expenses 10 Interest 30 2,160 Income before income taxes 1,670 Income taxes 835 Net income 835 Retained earnings—Jan. 1, 2020 320 1,155 Stock dividend declared and issued 625 Retained earnings—Dec. 31, 2020 $530 WATERWAY COMPANY COMPARATIVE BALANCE SHEETS AS OF DECEMBER 31 ($000 OMITTED) Assets 2020 2019 Current assets Cash $383 $110 U.S. Treasury notes (available-for-sale) 10 50 Accounts receivable 770 520 Inventory 710 570 Total current assets 1,873 1,250 Long-term assets Land 150 70 Buildings and equipment 920 610 Accumulated depreciation—buildings and equipment (200 ) (120 ) Patents (less amortization) 110 130 Total long-term assets 980 690 Total assets $2,853 $1,940 Liabilities and Stockholders’ Equity Current liabilities Accounts payable $425 $360 Income taxes payable 43 30 Notes payable 330 330 Total current liabilities 798 720 Long-term notes payable—due 2022 190 190 Total liabilities 988 910 Stockholders’ equity Common stock 1,335 710 Retained earnings 530 320 Total stockholders’ equity 1,865 1,030 Total liabilities and stockholders’ equity $2,853 $1,940 Prepare a statement of cash flows using the direct method. Changes in accounts receivable and accounts payable relate to sales and cost of goods sold. (Show amounts in the investing and financing sections that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)

Waterway Company has not yet prepared a statement of cash flows for the 2020 fiscal year. Comparative balance sheets as of December 31, 2019 and 2020, and a statement of income and retained earnings for the year ended December 31, 2020, are presented as follows. WATERWAY COMPANY STATEMENT OF INCOME AND RETAINED EARNINGS FOR THE YEAR ENDED DECEMBER 31, 2020 ($000 OMITTED) Sales revenue $3,830 Expenses Cost of goods sold $1,190 Salaries and benefits 740 Heat, light, and power 70 Depreciation 80 Property taxes 20 Patent amortization 20 Miscellaneous expenses 10 Interest 30 2,160 Income before income taxes 1,670 Income taxes 835 Net income 835 Retained earnings—Jan. 1, 2020 320 1,155 Stock dividend declared and issued 625 Retained earnings—Dec. 31, 2020 $530 WATERWAY COMPANY COMPARATIVE BALANCE SHEETS AS OF DECEMBER 31 ($000 OMITTED) Assets 2020 2019 Current assets Cash $383 $110 U.S. Treasury notes (available-for-sale) 10 50 Accounts receivable 770 520 Inventory 710 570 Total current assets 1,873 1,250 Long-term assets Land 150 70 Buildings and equipment 920 610 Accumulated depreciation—buildings and equipment (200 ) (120 ) Patents (less amortization) 110 130 Total long-term assets 980 690 Total assets $2,853 $1,940 Liabilities and Stockholders’ Equity Current liabilities Accounts payable $425 $360 Income taxes payable 43 30 Notes payable 330 330 Total current liabilities 798 720 Long-term notes payable—due 2022 190 190 Total liabilities 988 910 Stockholders’ equity Common stock 1,335 710 Retained earnings 530 320 Total stockholders’ equity 1,865 1,030 Total liabilities and stockholders’ equity $2,853 $1,940 Prepare a statement of cash flows using the direct method. Changes in accounts receivable and accounts payable relate to sales and cost of goods sold. (Show amounts in the investing and financing sections that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)

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

WATERWAY COMPANY STATEMENT OF INCOME AND RETAINED EARNINGS FOR THE YEAR ENDED DECEMBER 31, 2020 ($000 OMITTED)
Sales revenue		$3,830
Expenses
Cost of goods sold	$1,190
Salaries and benefits	740
Heat, light, and power	70
Depreciation	80
Property taxes	20
Patent amortization	20
Miscellaneous expenses	10
Interest	30	2,160
Income before income taxes		1,670
Income taxes		835
Net income		835
Retained earnings—Jan. 1, 2020		320
		1,155
Stock dividend declared and issued		625
Retained earnings—Dec. 31, 2020		$530

WATERWAY COMPANY COMPARATIVE BALANCE SHEETS AS OF DECEMBER 31 ($000 OMITTED)
Assets	2020		2019
Current assets
Cash	$383			$110
U.S. Treasury notes (available-for-sale)	10			50
Accounts receivable	770			520
Inventory	710			570
Total current assets	1,873			1,250
Long-term assets
Land	150			70
Buildings and equipment	920			610
Accumulated depreciation—buildings and equipment	(200	)		(120	)
Patents (less amortization)	110			130
Total long-term assets	980			690
Total assets	$2,853			$1,940

Liabilities and Stockholders’ Equity
Current liabilities
Accounts payable	$425			$360
Income taxes payable	43			30
Notes payable	330			330
Total current liabilities	798			720
Long-term notes payable—due 2022	190			190
Total liabilities	988			910
Stockholders’ equity
Common stock	1,335			710
Retained earnings	530			320
Total stockholders’ equity	1,865			1,030
Total liabilities and stockholders’ equity	$2,853			$1,940

Prepare a statement of cash flows using the direct method. Changes in accounts receivable and accounts payable relate to sales and cost of goods sold. (Show amounts in the investing and financing sections that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)

WATERWAY COMPANY
Statement of Cash Flows
($000 Omitted)
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