Question
Below is a list of accounts and post-closing account balances for Stargazer Inc. for the year ended May 31, 2022 (all amounts are listed at
Below is a list of accounts and post-closing account balances for Stargazer Inc. for the year ended May 31, 2022 (all amounts are listed at their normal balance): 2022 2021 Cash $33,250 $20,000 Accounts receivable 74,800 55,600 Inventory 188,700 199,000 Prepaid insurance 8,800 7,000 Plant assets 596,500 501,500 Less: Accumulated depreciation 145,400 122,000 Total $756,650 $661,100 Accounts payable $123,000 $115,000 Salaries and wages payable 61,000 72,000 Interest payable 24,700 22,600 Bonds payable (due June 30, 2028) 75,000 100,000 Common shares 351,000 280,000 Retained earnings 121,950 71,500 Total $756,650 $661,100 Net income for 2022 was $126,990 which includes the following adjusted account balances that were closed to retained earnings on May 31, 2022: Sales $1,211,220 Cost of goods sold 732,600 Salaries and wages expense 187,020 Interest expense 60,030 Insurance expense 22,320 Depreciation expense 23,400 Income tax expense 58,860 Net income $126,990 Additional Information: The company follows ASPE and classifies dividends paid and interest paid as operating activities on the statement of cash flows. Plant assets costing $95,000 were purchased by paying $44,000 in cash and issuing 5,000 common shares. The company issued 2,000 additional common shares. Cash dividends were declared and paid at the end of the fiscal year. Required: In the workspace below prepare a statement of cash flows, in good form, for the fiscal year ending May 31, 2022, including all required disclosures, using the indirect method.
Below is a list of accounts and post-closing account balances for Stargazer Inc. for the year ended May 31, 2022 (all amounts are listed at their normal balance) 2022 2021 Cash $33,250 $20,000 $ Accounts receivable 74,800 55,600 188,700 199,000 Inventory 8,800 7,000 596,500 501,500 Prepaid insurance Plant assets Less: Accumulated depreciation Total 145,400 122,000 $756,650 $661,100 Accounts payable $123,000 $115,000 Salaries and wages payable 61,000 72,000 Interest payable 24,700 22,600 Bonds payable (due June 30, 2028) 75,000 100,000 Common shares 351,000 280,000 Retained earnings 121,950 71,500 Total $756,650 $661,100 Net income for 2022 was $126,990 which includes the following adjusted account balances that were closed to retained earnings on May 31, 2022: $1,211,220 732,600 Sales Cost of goods sold Salaries and wages expense Interest expense 187,020 60,030 Insurance expense 22,320 23,400 Depreciation expense Income tax expense Net income 58,860 $126,990 Additional Information: 1. The company follows ASPE and classifies dividends paid and interest paid as operating activities on the statement of cash flows. 2. Plant assets costing $95,000 were purchased by paying $44,000 in cash and issuing 5,000 common shares. 3. The company issued 2,000 additional common shares. 4. Cash dividends were declared and paid at the end of the fiscal year. Required: In the workspace below prepare a statement of cash flows, in good form, for the fiscal year ending May 31, 2022, including all required disclosures, using the indirect method
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