Comparative balance sheet statements of Davis Inc. are presented below:

 

Davis Inc.

COMPARATIVE BALANCE SHEET ACCOUNTS

December 31, 2021, and 2020

 

 

                                                                                                            December 31          

Assets                                                                                      2021                       2020  

Cash                                                                                        $  33,000             $  20,000

Accounts Receivable                                                                  45,500                 48,000

    Less: Allowance for Doubtful Accounts                                (1,500)                (1,000)

Inventory                                                                                   55,000                 50,000

Dividend Receivable                                                                    3,000                   2,000

Investments                                                                                   7,000                 10,000

Land                                                                                            70,000                 40,000

Buildings & Equip.                                                                   231,000               250,000

  Less: Accumulated depreciation                                           (35,000)              (50,000)

         Totals                                                                             $408,000             $369,000

Liabilities

Accounts Payable                                                                       13,000                 20,000

Salaries Payables                                                                          2,000                   5,000

Interest payable                                                                             4,000                   2,000

Income tax payable                                                                      7,000                   8,000

Note payable                                                                               22,000                          0 

Bonds Payable                                                                          98,000                   70,000

Less: Discount on bonds                                                             (2,000)                 (3,000)

 

Shareholders' Equity   

Common Stock                                                                        210,000                200,000

Paid-in-capital-excess of par                                                     25,000                 20,000

Retained earnings                                                                      39,000                  47,000

Less: Treasury stock (at cost)                                                   (10,000)                         0

         Total                                                                               $408,000             $369,000

 

Additional data (all transactions occurred in 2021 unless otherwise specified): 

 

1. There were no write-offs of uncollectible accounts in 2021.

2. A building that originally cost $30,000 with accumulated depreciation balance of $20,000 was sold for $2,000.

3. Investments costing $3,000 was sold during the year for $5,000.

4. Land was acquired by paying $8,000 cash and issuing a 13%, seven-year, $22,000 note payable to the seller.

5. New equipment was purchased for $11,000 cash.

6. On January 1, $28,000 of bonds was sold at face value.

7. On January 19, Davis issued a 5% stock dividend (1,000 shares). The market price of the $10 par value common stock was $15 per share at that time.

8. Cash dividends of $15,000 were paid to shareholders.

9. On November 12, 500 shares of common stock were repurchased as treasury stock at a cost of $10,000. Davis uses the cost method to account for treasury stock.

 

 

Davis's 2021 income statement follows (ignore taxes):

Revenues    Sales                                                                            $200,000

            Dividend revenue                                                             3,000 

            Gain on sale of investments                                              2,000             205,000

 

       Expenses

Cost of goods sold                                                           120,000  Operating expenses                                                            26,000Depreciation expense                                                           5,000Interest expense                                                                   8,000                            Loss on sale of building                                                      8,000Income Tax Expense                                                         16,000               183,000           Net income                                                                                                  $ 22,000

 

 

Required:

  statement of cash flows for Davis Corporation for the year ended 2021. Note: use the indirect method for the operating activities section of the statement.

 

 

     Use the direct method for the operating activities section of the statement.