a. What was the balance of the Accumulated depreciation account on December 31, 2019?

b. Record all transactions that occurred during 2020.

c. Construct an Income Statement for the year ended December 31, 2020.

d. Construct a Balance Sheet for December 31, 2020.

e. Construct a Statement of Cash Flows for the year ended December 31, 2020.

____________

The Loren Company started its operations many years ago. Its balance sheet for December 31, 2019, showed the following account balances (there were no other accounts listed):

Paid in capital 500, Wages payable 10, Cash 280, Loan from bank 50,

Retained earnings 240, Loan to SZ 35, Accumulated depreciation (?),

Prepaid rent (to JG) 3, Inventory 59, Accounts payable 57,

Accounts receivable 153, PP&E (Gross) 450, Interest receivable (from SZ) 5,

Dividend payable 48.

During 2020 the following transactions occurred:

1. Depreciation expense was $45.

2. Loren purchased $932 worth of inventory on account. The ending balance of the inventory account was $100.

3. Sales, all on credit, were $1,203.

4. Rent in the amount of $107 was paid to JG, in cash, during the year. As of December 31, 2020,

the firm did not pay a portion of December's rent and owes its landlord, JG, $7 (recorded as rent payable). Over the years, Loren had only this rental property.

5. Payments on accounts payable were $889.

6. The SZ company paid Loren $5 interest for 2019, as well as interest of $4 for 2020. Also, it paid $10 to reduce its loan's principal.

7. Loren used the cash received from SZ to pay the bank for its loan. Out of the total amount, $7 was for interest and the rest was used to reduce the principal.

8. Collections from customers were $1,256.

9. A change in the tax code, effective 2021, will increase the cost of Loren in providing medical expertise services by 50%. The firm anticipates this change will increase its annual costs by $125.

10. The employees of Loren earned $60 as wages. Cash payments for wages were $65.

11. The company paid $36 for a dividend that was declared in 2019.

12. Advertising expenses were $40. The company paid this amount in cash plus $30 related to next year's advertising campaign.

13. An old machine that had original costs of $40 and net book value of $0 (zero) broke down and was disposed; there were no cash consequences.

14. Loren received a deposit of $100 from a customer for a special order that will be supplied next year. Selling price will be $150 and costs are estimated at $96.