Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

(10 points) Gs balance sheets for 2020 & 2021 and income statement for 2021 follow: 2020 2021 Cash $500,000 $800,000 Receivables from customers, net 600,000

  1. (10 points) Gs balance sheets for 2020 & 2021 and income statement for 2021 follow:

2020 2021

Cash $500,000 $800,000

Receivables from customers, net 600,000 600,000

Plant assets 2,800,000 2,902,583

Accumulated depreciation (900,000) (1,002,583)

$3,000,000 $3,300,000

Accounts payable and other accrued liabilities 215,000 200,223

Defined benefit pension obligation 125,000 115,000

Lease liability 0 86,777

Common stock ($1 par value) 100,000 100,000

Additional paid-in-capital, common stock 677,000 677,000

Other comprehensive income 15,000 20,000

Retained earnings 1,868,000 2,101,000

$3,000,000 $3,300,000

Sales 2,950,000

Operating expenses 2,659,000

Income before taxes 291,000

Income tax expense 58,000

Net income $233,000

Additional information for G follows:

  • During 2021, G neither purchased nor sold any plant assets.
  • Gs plant assets caption on its balance sheet includes Gs right-of-use leased assets.
  • On 01-01-21, G leased a machine with a useful life of 4 years. The noncancelable lease agreement required G to make 3 annual lease payments of $50,000 starting 01-01-21. After making the last lease payment, G will retain the machine. Gs borrowing rate on 01-01-21 was 10%. Gs interest expense on its lease is included in the operating expenses caption on its income statement. As of 12-31-21, Gs accrued interest payable on the lease is included in Gs accounts payable and other accrued liabilities caption on its balance sheet.
  • G has a defined benefit pension plan. During 2021, G recorded $78,000 of pension expense. Gs pension expense is included in the operating expenses caption on its income statement. During 2021 G made a cash contribution to the pension plan. Gs other comprehensive income caption on its balance sheet relates solely to its other comprehensive income gain/loss on its defined benefit pension plan.
  • During 2021, G did not declare or pay dividends on its common stock.
  • G uses the direct method and separates its receipts into receipts:
    • From customers
  • G uses the direct method and separates its payments into payments:
    • For other operating expenses
    • For income taxes.

Prepare a COMPLETE statement of cash flows for G. Be sure to label your section answers as provided by OR used in. Also, prepare any necessary footnote information/schedule G must present. In your footnote reconciliation of net income to cash flows from operating activities, be specific in your reconciling items. Also, be sure to support your reconciling item amounts with journal entries and/or amortization schedules and/or other supporting calculations that you deem appropriate.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

The Routledge Companion To Accounting And Risk

Authors: Margaret Woods

1st Edition

1138860123, 9781138860124

More Books

Students also viewed these Accounting questions

Question

d. Is the program accredited?

Answered: 1 week ago

Question

Describe the major barriers to the use of positive reinforcement.

Answered: 1 week ago