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Exercise 23-12 Condensed financial data of Sandhill Company for 2020 and 2019 are presented below. SANDHILL COMPANY COMPARATIVE BALANCE SHEET AS OF DECEMBER 31, 2020

Exercise 23-12

Condensed financial data of Sandhill Company for 2020 and 2019 are presented below.

SANDHILL COMPANY COMPARATIVE BALANCE SHEET AS OF DECEMBER 31, 2020 AND 2019

2020

2019

Cash

$1,780

$1,170

Receivables

1,760

1,280

Inventory

1,620

1,880

Plant assets

1,910

1,670

Accumulated depreciation

(1,210

)

(1,160

)

Long-term investments (held-to-maturity)

1,330

1,440

$7,190

$6,280

Accounts payable

$1,230

$920

Accrued liabilities

210

250

Bonds payable

1,370

1,560

Common stock

1,920

1,680

Retained earnings

2,460

1,870

$7,190

$6,280

SANDHILL COMPANY INCOME STATEMENT FOR THE YEAR ENDED DECEMBER 31, 2020

Sales revenue

$6,820

Cost of goods sold

4,600

Gross margin

2,220

Selling and administrative expenses

910

Income from operations

1,310

Other revenues and gains

Gain on sale of investments

80

Income before tax

1,390

Income tax expense

540

Net income

850

Cash dividends

260

Income retained in business

$590

Additional information: During the year, $70 of common stock was issued in exchange for plant assets. No plant assets were sold in 2020. Prepare a statement of cash flows using the direct method.

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