Question
Balance Sheet information (same as linked, provided here just in case!): Balance Sheet Information 12/31/2020 12/31/2019 Cash 123,150 110,800 Accounts Receivable 60,000 10,000 Allowance for
Balance Sheet information (same as linked, provided here just in case!):
| Balance Sheet Information | |
|
|
|
| 12/31/2020 | 12/31/2019 |
Cash | 123,150 | 110,800 |
Accounts Receivable | 60,000 | 10,000 |
Allowance for Bad Debts | (5,000) | (1,000) |
Rent Receivable | 700 | 600 |
Interest Receivable | 2,000 | 6,000 |
Inventory | 10,000 | 20,000 |
Prepaid Insurance | 4,000 | 2,000 |
Building and Equipment | 1,250 | 2,500 |
Accumulated Depreciation | (400) | (900) |
|
|
|
Accounts Payable | 35,000 | 20,000 |
Salaries Payable | 10,000 | 5,000 |
Unearned Rent Revenue | 2,000 | 6,000 |
Taxes Payable | 4,000 | 4,000 |
Deferred Tax Liability (DTL) | 2,000 | 1,000 |
Dividends Payable | 2,000 | 3,000 |
Interest Payable | 300 | 0 |
Bonds Payable | 10,000 | 0 |
Discount on Bonds Payable | (900) | (0) |
Common Stock ($1 par) | 37,400 | 34,000 |
APIC (all APIC accounts) | 73,900 | 67,000 |
Retained Earnings | 20,000 | 10,000 |
| 2020 Income Statement |
Sales Revenue | 95,000 |
Rent Revenue | 8,000 |
Interest Revenue | 10,000 |
|
|
Cost of Goods Sold | 40,000 |
Salaries Expense | 13,000 |
Compensation Expense (stock options) | 3,000 |
Depreciation Expense | 100 |
Insurance Expense | 5,000 |
Bad Debt Expense | 6,000 |
Interest Expense Bonds | 700 |
Tax Expense | 6,000 |
Loss on Sale of Building | 400 |
|
|
Net Income | $38,800 |
Consider the below facts about the Hewt Company's 2020 performance, as well as the Balance Sheet information located above.
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On January 1, 2020, Hewt issued bonds with a face value of $10,000 for $9,000 cash. The bonds mature in 10 years, and Hewt uses straight-line amortization for any associated discount or premium. Hewt did not retire any bonds during 2020.
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During 2020, Hewt did not purchase any buildings or equipment.
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All dividends declared in 2020 were cash dividends (e.g., not stock or property dividends).
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Hewt did not retire any common stock during 2020.
Prepare an entire statement of cash flows using the direct method.
Components of Cash from Operations:
Cash received from customers
Cash received for rent
Cash received for interest
Cash paid to suppliers
Cash paid to employees
Cash paid for insurance
Cash paid for interest
Cash paid for income taxes
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