Question
Chinatown Industries Ltd.'s 2021 single-step income statement and comparative balance sheet are provided below: CHINATOWN INDUSTRIES LTD. Income Statement Year Ended December 31, 2021 Revenue
Chinatown Industries Ltd.'s 2021 single-step income statement and comparative balance sheet are provided below:
CHINATOWN INDUSTRIES LTD.
Income Statement
Year Ended December 31, 2021
| Revenue | $ |
920,000 Expenses
| Cost of goods sold | $ 493,500 |
| Salaries | 189,000 |
| Depreciation expense | 25,000 |
| Other operating expenses | 73,500 |
| Interest expense | 13,000 |
| Income taxes | 18,000 |
812,000
| Profit | $ |
108,000
CHINATOWN INDUSTRIES LTD.
Balance Sheet
December 31
| 2021 |
2020
| Assets |
| Cash | $ 14,000 | $ |
10,000
| Accounts receivable | 29,000 |
24,000
| Inventory | 13,500 |
17,000
| Prepaid expenses | 2,000 |
2,000
| Land | 250,000 |
250,000
| Building and equipment | 497,000 |
422,000
| Accumulated depreciation | (150,000) |
(125,000)
| Total assets | $ 655,500 | $ |
600,000
| Liabilities and Shareholders' Equity |
| Accounts payable | $ 25,900 | $ |
22,400
| Taxes payable | 1,000 |
3,000
| Interest payable | 1,500 |
2,500
| Salaries payable | 8,000 |
5,000
| Long-term debt | 234,000 |
260,000
| Common shares | 120,000 |
100,000
| Retained earnings | 265,100 |
207,100
| Total liabilities and shareholders' equity | $ 655,500 | $ |
600,000 Additional information:
| 1. | No new long-term debt was taken during the year. |
| 2. | New equipment was purchased, and none was sold. |
| 3. | Common shares were issued for cash. |
| 4. | Cash dividends were paid to common shareholders. |
Instructions Prepare the cash flow statement for 2021, using the indirect method.
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Principles of Accounting
Authors: Needles, Powers, crosson
11th Edition
1439037744, 978-1133626985, 978-1439037744
