Answered step by step
Verified Expert Solution
Link Copied!

Question

...
1 Approved Answer

120 ARDUOUS COMPANY Comparative Balance Sheets December 31, 2021 and 2020 ($ in millions) 2021 2020 Assets Cash $ 83 Accounts receivable 192 198 Investment

image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
120 ARDUOUS COMPANY Comparative Balance Sheets December 31, 2021 and 2020 ($ in millions) 2021 2020 Assets Cash $ 83 Accounts receivable 192 198 Investment revenue receivable 10 6 Inventory 209 202 Prepaid insurance 8 12 Long-term investment 164 127 Land 200 152 Buildings and equipment 421 404 Less: Accumulated depreciation (100) (124) Patent 34 38 $1,258 $1,098 Liabilities Accounts payable $ $ 69 Salaries payable 10 13 Interest payable (bonds) 12 6 Income tax payable 14 18 Deferred tax liability 15 10 Notes payable 24 Lease liability 84 Bonds payable 217 279 Less: Discount on bonds (24) (26) Shareholders' Equity Common stock 436 412 Paid-in capital-excess of par 99 87 Preferred stock 77 0 Retained earnings 253 230 Less: Treasury stock (11) 0 $1,258 $1,098 52 $ 445 ARDUOUS COMPANY Income Statement For Year Ended December 31, 2021 ($ in millions) Revenues and gain: Sales revenue $ 425 Investment revenue 16 Gain on sale of treasury bills 4 Expenses and loss: Cost of goods sold 182 Salaries expense 75 Depreciation expense 13 Amortization expense 4 Insurance expense 9 Interest expense 30 Loss on sale of equipment Income tax expense 38 Net income 22 373 $ 72 Additional information from the accounting records: a. Investment revenue includes Arduous Company's $10 million share of the net income of Demur Company, an equity method Investee. b. Treasury bills were sold during 2021 at a gain of $4 milion. Arduous Company classifies its Investments in Treasury bilis as cash equivalents. c. Equipment originally costing $74 million that was one-half depreciated was rendered unusable by a flood. Most major components of the equipment were unharmed and were sold for $15 million, d. Temporary differences between pretax accounting income and taxable income caused the deferred tax liability to increase by $5 million. e. The preferred stock of Tory Corporation was purchased for $27 million as a long-term investment f. Land costing $48 million was acquired by Issuing $24 million cash and a 12%, four-year, $24 million note payable to the seller, 9. The right to use a building was acquired with a 15-year lease agreement present value of lease payments, $91 million. Annual lease payments of $7 million are paid at the beginning of each year starting January 1, 2021 h. $62 million of bonds were retired at maturity 1. In February, Arduous Issued a stock dividend (4.8 million shares). The market price of the $5 par value common stock was $7.50 per share at that time J. In April, 1 million shares of common stock were repurchased as treasury stock at a cost of $11 million Required: Prepare the statement of cash flows for Arduous Company using the Indirect method. (Amounts to be deducted should be indicated with a minus sign. Enter your answers in millions (.e., 10,000,000 should be entered as 10).) Statement of Cash Flows For year ended December 31, 2021 ($ in millions) Cash flows from operating activities: Net income Adjustments for noncash effects: Changes in operating assets and liabilities: Net cash flows from operating activities Cash flows from investing activities: Net cash flows from investing activities Cash flows from financing activities: Net cash flows from financing activities Net increase in cash Cash balance, January 1 Cash balance, DecemJer 31 Noncash investing and financing activities

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered 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

Students also viewed these Accounting questions