3. Toshiro Tools Ltd sells car parts through an online platform. Mkyta a very bright graduate from EU has been given comparative income statements and balance sheets for the past two years so that he can make a cash flow statement. He has also been given following additional information

Additional Information

The following information regarding the company's operations in 2019 is available from the company's accounting records:

a. Early in the year the company declared and paid a $4,000 cash dividend.

b. During the year market able securities costing $15,000 were sold for $14,000 cash, resulting in a $1,000 non operating loss.

c. The company purchased plant assets for $20,000, paying $2,000 in cash and issuing a note payable for the $18,000 balance.

d. During the year the company repaid a $10,000 note payable, but incurred an additional $18,000 in long-term debt as described in c.

e. The owners invested $15,000 cash in the business as a condition of the new loans described in d.

TOSHIRO TOOLS Income statement for year 2018 2019 Sales . . . . . . . $500,000 $ 350,000 Less: Cost of goods sold 200,000 140,000 Gross profit on sales . . . . . . . . . . . . . $300,000 $ 210,000 Less: Operating expenses (including depreciation of $34,000 in 2014 and $35,000 in 2015) 260,000 243,000 Loss on sale of marketable securities -0- 1,000 Net income (loss) . . $ 40,000 ($ 34,000) TOSHIRO TOOLS Balance sheet as at 31 December 2018 2019 Assets Cash and cash equivalents $ 10,000 $ 60,000 Marketable securities 20,000 5,000 Accounts receivable 40,000 23,000 Inventory . . . . . . . . 120,000 122,000 Plant and equipment (net of accumulated depreciation) . . . . . . 300,000 285,000 Totals . .. . . $490,000 $495,000 Liabilities & Stockholders' Equity Accounts payable . . $ 50,000 $ 73,000 Accrued expenses payable . . . . . . . . . . . . . . 17,000 14,000 Note payable . . . . . .. 245,000 253,000 Capital stock (no par value) . . . . . . . 120,000 135,000 Retained earnings .. . . . . . . 58,000 20,000 Totals .. . . . . $490,000 $495,000WORKINGS Statement of Cash Flows Worksheet Cash Source Flow Adjust- Adjusted Classi- Change or use? Effect ments Effect fication Assets (except cash and cash equivalents) Current assets: Noncurrent assets: . .. . Liabilities, Contra-Assets, and Stockholders' Equity Contra-assets: Current liabilities: Noncurrent liabilities: Stockholders' equity: Retained earnings . ..... Additional Entries .. ..... Total (net cash flow)