Comparative Balance Sheet Information June 30 2020 2019 Cash $ 91,960 $ 46,800 Accounts receivable (net) 101,000
Question:
Comparative Balance Sheet Information June 30 2020 2019 Cash $ 91,960 $ 46,800 Accounts receivable (net) 101,000 75,400 Inventory 80,210 116,210 Prepaid expenses 6,530 6,290 Equipment 161,000 149,000 Accumulated depreciation 34,600 17,000 Accounts payable 32,200 39,400 Wages payable 9,400 20,200 Income taxes payable 2,930 4,370 Notes payable (long-term) 53,000 89,000 Common shares 281,000 221,000 Retained earnings 27,570 2,730 Western Environmental Inc. Income Statement For Year Ended June 30, 2020 Sales $ 791,000 Cost of goods sold 479,800 Gross profit $ 311,200 Operating expenses:
| Comparative Balance Sheet Information | ||||||
| June 30 | ||||||
| 2020 | 2019 | |||||
| Cash | $ | 91,960 | $ | 46,800 | ||
| Accounts receivable (net) | 101,000 | 75,400 | ||||
| Inventory | 80,210 | 116,210 | ||||
| Prepaid expenses | 6,530 | 6,290 | ||||
| Equipment | 161,000 | 149,000 | ||||
| Accumulated depreciation | 34,600 | 17,000 | ||||
| Accounts payable | 32,200 | 39,400 | ||||
| Wages payable | 9,400 | 20,200 | ||||
| Income taxes payable | 2,930 | 4,370 | ||||
| Notes payable (long-term) | 53,000 | 89,000 | ||||
| Common shares | 281,000 | 221,000 | ||||
| Retained earnings | 27,570 | 2,730 | ||||
| Western Environmental Inc. | ||||||
| Income Statement | ||||||
| For Year Ended June 30, 2020 | ||||||
| Sales | $ | 791,000 | ||||
| Cost of goods sold | 479,800 | |||||
| Gross profit | $ | 311,200 | ||||
| Operating expenses: | ||||||
| Depreciation expense | $ | 70,370 | ||||
| Other expenses | 80,450 | |||||
| Total operating expenses | 150,820 | |||||
| Profit from operations | $ | 160,380 | ||||
| Gain on sale of equipment | 3,400 | |||||
| Profit before taxes | $ | 163,780 | ||||
| Income taxes | 60,380 | |||||
| Profit | $ | 103,400 | ||||
Required: Use the Western Environmental Inc. information given below to prepare a statement of cash flows for the year ended June 30, 2020, using the indirect method. (List any deduction in cash and cash outflows as negative amounts.)
- A note is retired at carrying value.
- The only changes affecting retained earnings during 2020 are profit and cash dividends paid.
- New equipment is acquired during 2020 for $73,370.
- The profit on sale of equipment costing $61,370 during 2020 is $3,400.
- Prepaid expenses and wages expense affect other expenses on the income statement.
- All sales and purchases of merchandise were on credit.
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