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Comparative balance sheet accounts of Sharpe Company are presented below. SHARPE COMPANY COMPARATIVE BALANCE SHEET ACCOUNTS AS OF DECEMBER 31 Debit Balances 2020 Cash $70,000
Comparative balance sheet accounts of Sharpe Company are presented below. SHARPE COMPANY COMPARATIVE BALANCE SHEET ACCOUNTS AS OF DECEMBER 31 Debit Balances 2020 Cash $70,000 Accounts Receivable 155,000 Inventory 75,000 Debt investments (available-for-sale) 55,000 Equipment 70,000 Buildings 145,000 Land 40,000 Totals $610,000 2019 $51,000 130,000 61,000 85,000 48,000 145,000 25,000 $545,000 Credit Balances Allowance for Doubtful Accounts Accumulated Depreciation Equipment Accumulated Depreciation-Buildings Accounts Payable Income Taxes Payable Long-Term Notes Payable Common Stock Retained Earnings Totals $10,000 21,000 37,000 66,000 12,000 62,000 310,000 92,000 $610,000 $8,000 14,000 28,000 60,000 10,000 70,000 260,000 95,000 $545,000 1. Equipment that cost $10,000 and was 60% depreciated was sold in 2020. 2. Cash dividends were declared and paid during the year. 3. Common stock was issued in exchange for land. 4. Investments that cost $35,000 were sold during the year. 5. There were no write-offs of uncollectible accounts during the year. Sharpe's 2020 income statement is as follows. $950,000 600,000 350,000 250,000 100,000 Sales revenue Less: Cost of goods sold Gross profit Less: Operating expenses (includes depreciation expense and bad debt expense) Income from operations Other revenues and expenses Gain on sale of investments Loss on sale of equipment Income before taxes Income taxes Net income $15,000 (3,000) 12,000 112,000 45,000 $67,000 (a) Compute net cash provided by operating activities under the direct method. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) Net cash flow from operating activities (b) Prepare a statement of cash flows using the indirect method. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)
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