ACG 3113 Summer 2020 Practice Set #4 Additional Information 2020: 120,000 Treasury Stock, Common (8,000) -0- Retained earnings 130,000 Accumulated Other Comprehensive Income 2,000 4,000 Totals $423,500 $529,000 The following are comparative balance sheets and an income statement for the The Circle Company. The Circle Company Balance Sheets As of December 31 2020 2019 Assets: Cash $75,000 $100,000 Accounts receivable 163,500 125,000 Inventory 133,000 220,000 Property, Plant and Equipment 70,000 50,000 Less: Accumulated Depreciation (40,000) (35,000) Long-term investments 20.000 65,000 Valuation Allowance - LT Investments 2,000 4,000 Totals $423.500 $529,000 Cash dividends were declared and paid in 2020. Amount should be computed from relevant information provided in the PS. No stock dividends were declared or issued in 2020 No Property, Plant or Equipment was sold in 2020 . During 2020, Property, Plant and Equipment of $7,500 was acquired by signing a $7,500 Notes Payable on the day of acquisition. All other acquisitions were paid with cash Treasury Stock was purchased during the year A portion of the Long-term investments were sold receiving cash during the year. Any change in Bonds Payable relates to repayment of princi- ple (face) amounts. All sales of Common Stock (No par value) were for cash Prepare the Statement of Cash Flows of The Circle Company for the year ended December 31, 2020. The Circle Company Income Statement For the Year Ended December 31, 2020 Sales $571,000 Cost of Goods sold 372,500 Gross Profit $198,500 Operating expenses (excluding depreciation expense) 182,000 Depreciation expense 5,000 Income from operations $ 11,500 Other expenses: Loss on sale of long-term investment (4,500) Net Income 7,000 Other comprehensive Income - Unrealized holding gains/(loss) (2,000 Comprehensive Income $ 5,000 $ Liabilities and shareholders' equity: Accounts payable - Merchandise 35,000 $110,000 Operating expenses payable 32,000 25,000 Notes Payable -0- Bonds payable 110,000 Common stock 150,000 A. Prepare a Statement of Cash Flows (direct method) using the Spreadsheet Approach we demonstrated in class. B. Using your spreadsheet from A above prepare a Statement of Cash Flows, in good form, for the year ended December 31, 2020 (A reconciliation schedule is not required.) C. Using the information provided above, prepare the Operating Activities section of the Statement of Cash Flows, using the indi- rect method. This requirement does not have to be provided in Good Form but should appear in a format similar to the one we used in class. D. Submit both A and B electronically in Canvas using one Excel file with separate tabs for each requirement (A, B and C). 7,500 60,000 175,000 ACG 3113 Summer 2020 Practice Set #4 Additional Information 2020: 120,000 Treasury Stock, Common (8,000) -0- Retained earnings 130,000 Accumulated Other Comprehensive Income 2,000 4,000 Totals $423,500 $529,000 The following are comparative balance sheets and an income statement for the The Circle Company. The Circle Company Balance Sheets As of December 31 2020 2019 Assets: Cash $75,000 $100,000 Accounts receivable 163,500 125,000 Inventory 133,000 220,000 Property, Plant and Equipment 70,000 50,000 Less: Accumulated Depreciation (40,000) (35,000) Long-term investments 20.000 65,000 Valuation Allowance - LT Investments 2,000 4,000 Totals $423.500 $529,000 Cash dividends were declared and paid in 2020. Amount should be computed from relevant information provided in the PS. No stock dividends were declared or issued in 2020 No Property, Plant or Equipment was sold in 2020 . During 2020, Property, Plant and Equipment of $7,500 was acquired by signing a $7,500 Notes Payable on the day of acquisition. All other acquisitions were paid with cash Treasury Stock was purchased during the year A portion of the Long-term investments were sold receiving cash during the year. Any change in Bonds Payable relates to repayment of princi- ple (face) amounts. All sales of Common Stock (No par value) were for cash Prepare the Statement of Cash Flows of The Circle Company for the year ended December 31, 2020. The Circle Company Income Statement For the Year Ended December 31, 2020 Sales $571,000 Cost of Goods sold 372,500 Gross Profit $198,500 Operating expenses (excluding depreciation expense) 182,000 Depreciation expense 5,000 Income from operations $ 11,500 Other expenses: Loss on sale of long-term investment (4,500) Net Income 7,000 Other comprehensive Income - Unrealized holding gains/(loss) (2,000 Comprehensive Income $ 5,000 $ Liabilities and shareholders' equity: Accounts payable - Merchandise 35,000 $110,000 Operating expenses payable 32,000 25,000 Notes Payable -0- Bonds payable 110,000 Common stock 150,000 A. Prepare a Statement of Cash Flows (direct method) using the Spreadsheet Approach we demonstrated in class. B. Using your spreadsheet from A above prepare a Statement of Cash Flows, in good form, for the year ended December 31, 2020 (A reconciliation schedule is not required.) C. Using the information provided above, prepare the Operating Activities section of the Statement of Cash Flows, using the indi- rect method. This requirement does not have to be provided in Good Form but should appear in a format similar to the one we used in class. D. Submit both A and B electronically in Canvas using one Excel file with separate tabs for each requirement (A, B and C). 7,500 60,000 175,000