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