Question
1. Assume current liabilities include only items from operations (e.g., accounts payable, taxes payable). Long-term liabilities include items from financing (e.g. bonds and other long-term
1. Assume current liabilities include only items from operations (e.g., accounts payable, taxes payable). Long-term liabilities include items from financing (e.g. bonds and other long-term liabilities). Note that the company did not sell any equipment and did not borrow any additional long-term liabilities throughout the year.
Prepare the cash flow statement for 2020 using the indirect method. Assume no dividends were declared or paid in 2020.
Do not enter dollar signs or commas in the input boxes
Increase or decrease in cash from financing activities=
2.Villa Foods International provides food and beverage services to institutional facilities like school and hospitals. At the end of 2020, the income statement and comparative balance sheet were prepared as shown below.
Villa Foods International Balance Sheet As at December 31 | ||
2020 | 2019 | |
Assets | ||
Current Assets | ||
Cash | $354,070 | $127,800 |
Accounts Receivable | $231,900 | $260,100 |
Food & Beverage Inventory | $501,700 | $456,100 |
Prepaid Expenses | $24,100 | $24,100 |
Total Current Assets | $1,111,770 | $868,100 |
Long-Term Assets | ||
Land | $0 | $23,600 |
Equipment | $338,400 | $338,400 |
Accumulated Depreciation | $-103,700 | $-99,100 |
Total Long-Term Assets | $234,700 | $262,900 |
Total Assets | $1,346,470 | $1,131,000 |
Liabilities | ||
Current Liabilities | ||
Accounts Payable | $309,000 | $325,700 |
Notes Payable, Current Portion | $33,900 | $24,500 |
Total Current Liabilities | $342,900 | $350,200 |
Notes Payable, Long-Term Portion | $211,800 | $198,500 |
Total Liabilities | $554,700 | $548,700 |
Shareholders' Equity | ||
Common Shares | $296,000 | $260,000 |
Retained Earnings | $495,770 | $322,300 |
Total Shareholders' Equity | $791,770 | $582,300 |
Total Liabilities and Equity | $1,346,470 | $1,131,000 |
Additional Information: During 2020, land was sold for a loss of $3,300. There was no purchase of equipment throughout the year. The company did not pay off any amount of the notes payable.
Villa Foods International Income Statement For the Year Ended December 31, 2020 | |
Revenue | $2,485,000 |
Cost of Sales | $1,491,000 |
Gross Profit | $994,000 |
Operating Expenses | |
Depreciation Expense | $4,600 |
Other Operating Expenses | $652,300 |
Total Operating Expenses | $656,900 |
Income from Operations | $337,100 |
Other Income and Expenses | |
Loss on Sale of Land | $-3,300 |
Income before Income Tax | $333,800 |
Income Tax | $116,830 |
Net Income | $216,970 |
Create the cash flow statement using the indirect method.
Do not enter dollar signs or commas in the input boxes. Use the negative sign for a decrease in cash.
Villa Foods International Cash Flow Statement For the Year Ended December 31, 2020 | ||
Cash Flow from Operating Activities | ||
Net Income | Answer | |
Adjustments for Non-Cash Items | ||
Depreciation | Answer | |
Loss on Sale of Land | Answer | |
Change in Current Assets and Current Liabilities | ||
Decrease in Accounts Receivable | Answer | |
Increase in Food & Beverage Inventory | Answer | |
Decrease in Accounts Payable | Answer | |
Net Cash Provided (Used) by Operating Activities | Answer | |
Cash Flow from Investing Activities | ||
Sale of Land | Answer | |
Net Cash Provided (Used) by Investing Activities | Answer | |
Cash Flow from Financing Activities | ||
Proceeds from Notes Payable | Answer | |
Payment of Cash Dividend | Answer | |
Issue of Common Shares | Answer | |
Net Cash Provided (Used) by Financing Activities | Answer | |
Net Increase (Decrease) in Cash | Answer | |
Cash at the Beginning of the Year | Answer | |
Cash at the End of the Year | Answer |
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