Chapter : Cash Flow

Instructions

a. Prepare a Cash Flow from operation section for Monstadt Company using Indirect Method

b. Prepare a statement of cash flows for Monstadt Company for the year 2020 using Direct Method

The following information is taken from Monstadts Company's financial statements: MONSTADT COMPANY Comparative Balance Sheets December 31, 2020 ASSETS 2020 2019 Cash $ 54.000 $ 29.000 Account Receivable $68.000 $ 26.000 Inventory $ 54.000 $ Prepaid Expenses $ 4.000 $ 6.000 Land $ 45.000 $ 70.000 Buildings $ 200.000 $ 200.000 Accumulated Depreciation - Buildings $ (11.000) $ (3.000) Equipment $ 193.000 $ 68.000 Accumulated Depreciation - Equip. $ (28.000) $ (10.000) Totals $ 579.000 $ 386.000 Increase/Decrease 25.000 Increase 42.000 Increase 54.000 Increase 2.000 Decrease 25.000 Decrease 10.000 Increase 125.000 Increase 18.000 Increase Liabilities and Stockholders' Equity Accounts Payable Accrued Expenses Payable Bonds Payable Common Stock ($1 par) Retained Earnings Totals $ 23.000 $ 10.000 $ 100.000 $ 240.000 $ 206.000 $ 579.000 $ 40.000 $ $ 150.000 $ 60.000 $ 136.000 $ 386.000 17.000 Decrease 10.000 Increase 50.000 Decrease 180.000 Increase 70.000 Increase $ 890.000 MONSTADT COMPANY Income Statement For the Year Ended December 31, 2020 Sales Revenue Cost of Goods Sold $ 465.000 Operating Expenses $ 221.000 Interest Expense $ 12.000 Gain on disposal of equipment $ 2.000 Income before Income Taxes Income Tax Expense Net Income $ $ $ $ 696.000 194.000 65.000 129.000 Additional information: 1. All depreciation expense of $33.000 is in the operating expenses. 2. Land sold at Book Value in cash. 3. Dividends declared and paid were $59.000 in 2020. 4. Equipment was purchased at a cost of $166.000. Another equipment at a cost of $41.000 and a book value of $34,000 was sold for $36,000 in cash. 5. Bonds were redeemed $20.000 in cash and $30.000 by issuing common stock 6. $150.000 of Common Stock ($1 par) is issued for cash. Instructions a. Prepare a Cash Flow from operation section for Monstadt Company using Indirect Method. b. Prepare a statement of cash flows for Monstadt Company for the year 2020. (Direct Method)