$ 5,000 95,000 Key Financial Statement Relations: Balance Sheet, Income Statement, and statement of Cash Flow Compute the missing amounts in the following financial statements. You may assume that accounts receivable relate only to credit sales and that accounts payable relate only to credit purchases of inventory. There were no sales of property and equipment during 2019 and any purchases of property and equipment were made using cash. Note: Use negative signs with answers, when appropriate. *Hint: 2019 PPE, net = 2018 PPE, net - Depreciation expense + Purchases of PPE - Sales of PPE. Compute Depreciation expense below in the Income Statement. See Statement of Cash Flow below for Purchases of PPE in 2019. Balance Sheet at December 31, 2018 December 31, 2019 Current assets Cash 10,000 $26,500 Marketable securities 6,000 Accounts receivable 12,000 37,000 Merchandise inventory 52,000 23,000 Prepaid advertising 15,000 18,000 Total current assets 109,500 Property, plant and equipment (PPE), net* $ 223,000 Land 15,000 Intangible assets 0 x 7,000 Total assets $261,000 $343,500 Current liabilities Accounts payable $12,000 $23,000 Wages payable 0 X 18,000 Interest payable 9,000 6,500 Dividends payable 3,000 Ox Taxes payable 17,000 12,000 Total current liabilities 46,000 61,500 Long-term debt 86,000 Shareholders' equity Common stock 150,000 172,000 Retained earnings 23,000 32,000 Treasury stock (10,000) 0X Total liabilities and shareholders' equity $261,000 $343,500 0X Income Statement for Year Ending December 31, 2019 Sales revenue $ 285,000 Cost of sales 123,000 Gross profit 162,000 Expenses: Wages 15,000 Advertising 18,000 Depreciation 28,000 Amortization 4,000 Total expenses 65,000 Operating profit 97,000 Interest 11,500 X Income (loss) before taxes 88,000 Tax expense 35,000 Net income $53,000 December 31, 2019 $260,000 (83,000) (2,000) (40,000) (11,500) 18,000 x 102,500 Statement of Cash Flow for Year Ended Cash flow from operating activities Cash collections from customers Cash payments for: Inventory Wages Taxes Interest Advertising Net cash provided by operations Cash flow from investing activities (Purchases) sale of property, plant and equipment (Purchase) sale of marketable securities (Purchase) sale of land Net cash provided by investing activities Cash flow from financing activities Issuance (repayment) of long-term debt Payment of dividend Issuance (repurchase) of common stock (Purchase) sale of treasury stock Net cash provided by financing activities Change in cash (111,000) 1,000 11,000 (99,000) 34,000 (45,000) 172,000 x 2,000 13,000 0 x $
