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Cash-flow assignment IIIIIIL Computer Services Company Income Statement For the Year Ended December 31, 2020 Sales revenue $507,000 Cost of goods sold $150,000 Operating expenses
- Cash-flow assignment
IIIIIIL Computer Services Company Income Statement For the Year Ended December 31, 2020 Sales revenue $507,000 Cost of goods sold $150,000 Operating expenses (excluding depreciation) 111,000 Depreciation expense 9.000 Loss on disposal of plant assets 3,000 Interest expense 42.000 315.000 Income before income tax 192.000 Income tax expense 47.000 Net income $145.000 Additional information for 2020: 1. Depreciation expense was comprised of $6,000 for building and $3,000 for equipment. 2. The company sold equipment with a book value of $7,000 (cost $8,000, less accumulated depreciation $1,000) for $4,000 cash. 3. Issued $1 10,000 of long-term bonds in direct exchange for land. 4. A building costing $120,000 was purchased for cash. Equipment costing $25,000 was also purchased for cash. 5. Issued common stock for $20,000 cash. 6. The company declared and paid a $29,000 cash dividend. Required: Prepare a full cash flow (all the sections) using the indirect method also prepare the journal entry for #2 - In the additional information aboveComputer Services Company Comparative Balance Sheets December 31 Change in Account Balance Assets 2020 2019 Increase/Decrease Current assets Cash $ 55.000 $ 33,000 $ 22,000 Increase Accounts receivable 20,000 30,000 10,000 Decrease Inventory 15,000 10,000 5,000 Increase Prepaid expenses 5,000 1,000 4,000 Increase Property, plant, and equipment Land 130,000 20,000 1 10,000 Increase Buildings 160,000 40.000 120,000 Increase Accumulated depreciation-buildings (1 1,000) (5,000) 6,000 Increase Equipment 27.000 10,000 17,000 Increase Accumulated depreciation-equipment (3,000) (1,000) 2,000 Increase Total assets $398,000 $138,000 Liabilities and Stockholders' Equity Current liabilities Accounts payable $ 28,000 $ 12,000 $ 16,000 Increase Income taxes payable 6,000 8.000 2,000 Decrease Long-term liabilities Bonds payable 130,000 20,000 1 10,000 Increase Stockholders' equity Common stock 70,000 50.000 20,000 Increase Retained earnings 164,000 48.000 1 16,000 Increase Total liabilities and stockholders' equity $398,000 $138.000
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