Statement of Cash Flows Angela\'s Cleaning Consortium Seymour-Johnson, Inc. Comp

Question

Statement of Cash Flows Angela's Cleaning Consortium Seymour-Johnson, Inc. Comparative Balance Sheet Income Statement December 31, 2020 and 2019 For the Year Ended December 31, 2020 2020 2019 Net sales $ 386,000 ASSETS Cost of goods sold     (212,000) Current assets Gross profit      174,000    Cash $    66,500 $    62,000 Operating expenses    Accounts receivable        95,000      113,000 Salaries and wages expense       (66,000)    Merchandise inventory      172,000      165,000 Depreciation expense       (25,000)       Total current assets      333,500      340,000 Other operating expenses       (28,000) Long-term investments Income from operations        55,000    Investment in Walking Dead Co.                 -        50,000 Other revenues and gains Property, buildings, and equipment      507,000      304,000    Interest revenue        15,000    Less: Accumulated depreciation       (59,500)       (42,000)    Dividend revenue          9,700 Total assets $ 781,000 $ 652,000    Gain on disposal of plant assets        12,000 Liabilities and Stockholders' Equity Other expenses and losses Current liabilities    Interest expense       (15,000)       Accounts payable $ 144,000 $ 175,000 Income before income taxes        76,700       Accrued liabilities        17,000        47,000 Income tax expense       (14,000)       Total current assets      161,000      222,000 Net Income $    62,700    Long-term Liabilities       Notes payable, long-term      160,000        90,000          Total liabilities      321,000      312,000 Stockholders' equity    Common stock      370,000      250,000    Retained earnings      140,000        90,000    Treasury stock       (50,000)                 -          Total Stockholders’ Equity      460,000      340,000 Total Liabilities & Stockholders' Equity $ 781,000 $ 652,000 Additional Information: A.   Sold plant assets with a cost of $75,000 and accumulated depreciation of $7,500,        yielding a gain of disposal of plant assets of $12,000. B.   Purchased plant assets by paying cash. C.   Issued Notes Payable for Cash. D.   Sold investment in Walking Dead Co at cost (zero gain/loss). E.   Issued Common Stock for Cash. F.   Purchased Treasury Stock for Cash. Requirements: Prepare, in good form, a Statement of Cash Flows using the indirect method. Statement of Cash Flows Angela's Cleaning Consortium Seymour-Johnson, Inc. Comparative Balance Sheet Income Statement December 31, 2020 and 2019 For the Year Ended December 31, 2020 2020 2019 Net sales $ 386,000 ASSETS Cost of goods sold     (212,000) Current assets Gross profit      174,000    Cash $    66,500 $    62,000 Operating expenses    Accounts receivable        95,000      113,000 Salaries and wages expense       (66,000)    Merchandise inventory      172,000      165,000 Depreciation expense       (25,000)       Total current assets      333,500      340,000 Other operating expenses       (28,000) Long-term investments Income from operations        55,000    Investment in Walking Dead Co.                 -        50,000 Other revenues and gains Property, buildings, and equipment      507,000      304,000    Interest revenue        15,000    Less: Accumulated depreciation       (59,500)       (42,000)    Dividend revenue          9,700 Total assets $ 781,000 $ 652,000    Gain on disposal of plant assets        12,000 Liabilities and Stockholders' Equity Other expenses and losses Current liabilities    Interest expense       (15,000)       Accounts payable $ 144,000 $ 175,000 Income before income taxes        76,700       Accrued liabilities        17,000        47,000 Income tax expense       (14,000)       Total current assets      161,000      222,000 Net Income $    62,700    Long-term Liabilities       Notes payable, long-term      160,000        90,000          Total liabilities      321,000      312,000 Stockholders' equity    Common stock      370,000      250,000    Retained earnings      140,000        90,000    Treasury stock       (50,000)                 -          Total Stockholders’ Equity      460,000      340,000 Total Liabilities & Stockholders' Equity $ 781,000 $ 652,000 Additional Information: A.   Sold plant assets with a cost of $75,000 and accumulated depreciation of $7,500,        yielding a gain of disposal of plant assets of $12,000. B.   Purchased plant assets by paying cash. C.   Issued Notes Payable for Cash. D.   Sold investment in Walking Dead Co at cost (zero gain/loss). E.   Issued Common Stock for Cash. F.   Purchased Treasury Stock for Cash. Requirements: Prepare, in good form, a Statement of Cash Flows using the indirect method.

Explanation / Answer

Cash flow statement using Indirect Method For the year ended December 31,2020 Cash flow from Operarting activities Net Income $62,700.00 Adjustments to Net Income Depreciation $25,000.00 Gain on disposal of plant assets -$12,000.00 Changes in working capital Decrease in Accounts Receivables $18,000.00 Increase in Inventory -$7,000.00 Decrease in Accounts Payable -$31,000.00 Decrease in accrued liabilities -$30,000.00 -$37,000.00 Net Cash available from Operating activities $25,700.00 Cash flow from Investing activities Sale of plant assets $79,500.00 Purchase of plant assets -$278,000.00 Sale of investment in Walking Dead Co $50,000.00 Net cash used for Investing activities -$148,500.00 Cash flow from financing activities Issue of notes payable $70,000.00 Issue of common stock $120,000.00 Purchase of Treasury stock -$50,000.00 Dividend paid -$12,700.00 Net Cash available from Financing activities $127,300.00 Net cash surplus / (deficit) $4,500.00 Add : Cash balance as on 2019 $62,000.00 Ending Cash balance as on 2020 $66,500.00

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