Question
Culver Inc., a greeting card company that follows ASPE, had the following statements prepared as at December 31, 2020: CULVER INC. Comparative Statement of Financial
Culver Inc., a greeting card company that follows ASPE, had the following statements prepared as at December 31, 2020:
CULVER INC. Comparative Statement of Financial Position December 31 2020 2019 Cash $47,775 $25,090 Accounts receivable 57,930 51,030 Inventory 39,990 60,070 Prepaid rent 5,210 4,100 Equipment 161,990 130,120 Accumulated depreciationequipment (35,210 ) (25,100 ) Goodwill 28,000 68,000 Total assets $305,685 $313,310 Accounts payable $46,190 $40,120 Income tax payable 3,990 6,070 Salaries and wages payable 8,090 4,090 Shortterm loans payable 7,930 10,030 Longterm loans payable 68,000 87,000 Common shares 130,000 130,000 Retained earnings 41,485 36,000 Total liabilities and shareholders equity $305,685 313,310
CULVER INC. Income Statement Year Ending December 31, 2020 Sales revenue $348,490 Cost of goods sold 165,000 Gross margin 183,490 Operating expenses 120,000 Operating income 63,490 Interest expense $12,100 Impairment lossgoodwill 40,000 Gain on disposal of equipment (2,400 ) 49,700 Income before income tax 13,790 Income tax expense 4,105 Net income $9,685
Additional information:
1. Dividends on common shares in the amount of $4,200 were declared and paid during 2020. 2. Depreciation expense is included in operating expenses, as is salaries and wages expense of $70,000. 3. Equipment with a cost of $36,000 that was 70% depreciated was sold during 2020.
Prepare a statement of cash flows using the direct method. (Show amounts that decrease cash flow with either a - sign e.g. -10,000 or in parenthesis e.g. (10,000).)
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