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C20-2 Lucky Lady Inc.: Preparing comprehensive statement of cash flows (LO 20-1, LO 20-2, LO 20-3. LO 20-4) The income statement for the year ended

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C20-2 Lucky Lady Inc.: Preparing comprehensive statement of cash flows (LO 20-1, LO 20-2, LO 20-3. LO 20-4) The income statement for the year ended December 31, 20X1, as well as the balance sheets as of December 31, 20X1, and December 31, 20x0, for Lucky Lady Inc. follow. This information is taken from the financial statements of a real company whose name has been disguised. Income Statement ($ in thousands) For the Year Ended December 31, 20x1 Revenues Casino Rooms $ 26,702 Food and beverage 2.897 2,351 Other hotel/casino 5.066 Airline 20.784 Total revenues 57.800 Operating Expenses Casino 9.341 Rooms 1.016 Food and beverage 2.529 Other hotel/casino 5.777 Airline 20.599 Selling general, and administrative (including bad debt expense of $3,855) 19,679 Depreciation expense 8.018 Hotel preopening expenses 45,130 Aircraft carrying value adjustment 68.948 Total operating expenses 181,037 Operating income (123.237) Nonoperating items: 12.231 Interest income (6.596) Interest expense 16 Other, net (117,586) Income before taxes -0- Provision for income taxes $(117,586) Net income (loss) Balance Sheets December 31. 20X1 20XO ($ in thousands Assets Cash Gross accounts receivable Less: Allowance for doubtful accounts Prepaid expenses Inventories Total current assets Gross property, plant, and equipment Less: Accumulated depreciation Preopening expenses Other operating assets Total assets $ 211.305 35.249 (4.733) 11.755 12,662 266,238 953.796 (86,512) $ $79.963 2,178 (1,531) 1.219 154 581.983 471.506 (21.796) 10,677 21.116 $1,063,486 (continued) -0- 26,601 $1,160,123 20-50 CHAPTER 20 Statement of Cash Flows Balance Sheets December 31. 20x0 20x1 $ 945 9.429 9.744 32.296 289 -0- th Liability Accounts payable Acesses and we Accred interno debe Other acred Constructibles Current maturite finances Current martie, long terme Total currentes Deferred revenues Deferred income Long-term obligation, franceses Long-term debe Totales Common stock Capital in excess of our value Common stock in treasury Retained earnings (deficit) Total stockholders equity Total liabilities and equity $14.181 K194 9.472 102 44 10 1.573 1653 10.784 6.517 14.044 37,023 -0. 6,517 162 473.000 536,704 481.427 678.365 483 662,365 (29.490) (151626) 481.755 $1,160,123 $89.827 (29.490) (34,040) 326,782 $1.063.486 Additional Information and Author Notes: dinyal valuation adjustment. The company reduced the book value of its aircraft and related equipment to their expected recoverable values and recognized an aircraft carrying value adjustment in the 20XI income statement Author Note: You may treat this item as "extra" depreciation recorded during the year due to abnormal decline in the asset value. Property, plant, and equipment Includes land, buildings, aircraft equipment, furniture and fixtures, equipment under capital lease, and so on. During 20X1. the company acquired equipment under capital leases for $16.987,000. The company also sold equipment with a net book value of $2.501.000 for $684.000 cash. Author Note: The gain or loss on this sale is combined with some other item in the income statement. Any other change in the gross book value of Property, plant, and equipment may be attributed to outright purchase of other equipment and building construction costs.] Finance lease and long-term liabilities: Author Note: When preparing the cash flow statement, you may find it convenient to combine the current and long-term portions of each of these liabilities.] Preopening expenses: Pro-opening expenses include direct project salaries, advertising and other pre-opening services incurred during the preopening period of the Lucky Lady Hotel. Such expenses were expensed upon opening the facility. Stock offering: The increases in Common stock and Capital in excess of par accounts are due to a common stock offering completed on August 17, 20X1. Laundry loan: On June 16, 20X1, the company obtained a $10,000,000 loan from a financial insti- tution for a laundry facility in North Las Vegas, Nevada. As of December 31, 20X1. $10,000,000 has been drawn down under the loan. Construction of the facility was completed in December 20X1. The laundry provides the laundry and dry cleaning services for the Lucky Lady Hotel. Required: Using the indirect method, prepare the statement of cash flows for the year ended December 31, 20X1, in as much detail as possible. For example, borrowing and repayment, if any, should be shown separately as financing inflow and outflow, respectively. Similarly, to the extent that Coses 20-51 Information is available, separately disclose and explain the changes to each asset and each liability account that affected Lucky Lady's cash flows during 20X1

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