Exercise 23-14 Sweet Inc., a greeting card company, had the following statements prepared as of December 31, 2020. SWEET INC. COMPARATIVE BALANCE SHEET AS OF DECEMBER 31, 2020 AND 2019 12/31/20 12/31/19 Cash $6,100 $7,000 Accounts receivable 62,200 51,500 Short-term debt investments (available-for-sale) 34,900 17,900 Inventory 40,300 60,500 Prepaid rent 5,000 3,900 Equipment 153,200 131,200 Accumulated depreciation-equipment (35,000) (24,700 ) Copyrights 46,200 49,800 Total assets $312,900 $297,100 Accounts payable Income taxes payable Salaries and wages payable Short-term loans payable Long-term loans payable Common stock, $10 par Contributed capital, common stock Retained earnings Total liabilities & stockholders' equity $46,000 4,000 7,900 8,100 59,800 100,000 30,000 57,100 $312,900 $40,000 6,000 4,000 10,100 69,200 100,000 30,000 37,800 $297,100 SWEET INC. INCOME STATEMENT FOR THE YEAR ENDING DECEMBER 31, 2020 Sales revenue Cost of goods sold Gross profit Operating expenses Operating income Interest expense $11,400 $336,150 174,100 162,050 120,800 41,250 Income before tax Income tax expense Net income 31,750 6,350 $25,400 Additional information: 1. Dividends in the amount of $6,100 were declared and paid during 2020. 2. Depreciation expense and amortization expense are included in operating expenses. 3. No unrealized gains or losses have occurred on the investments during the year. 4. Equipment that had a cost of $20,200 and was 70% depreciated was sold during 2020. 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. SWEET INC. Statement of Cash Flows Adjustments to reconcile net income to Exercise 23-14 Sweet Inc., a greeting card company, had the following statements prepared as of December 31, 2020. SWEET INC. COMPARATIVE BALANCE SHEET AS OF DECEMBER 31, 2020 AND 2019 12/31/20 12/31/19 Cash $6,100 $7,000 Accounts receivable 62,200 51,500 Short-term debt investments (available-for-sale) 34,900 17,900 Inventory 40,300 60,500 Prepaid rent 5,000 3,900 Equipment 153,200 131,200 Accumulated depreciation-equipment (35,000) (24,700 ) Copyrights 46,200 49,800 Total assets $312,900 $297,100 Accounts payable Income taxes payable Salaries and wages payable Short-term loans payable Long-term loans payable Common stock, $10 par Contributed capital, common stock Retained earnings Total liabilities & stockholders' equity $46,000 4,000 7,900 8,100 59,800 100,000 30,000 57,100 $312,900 $40,000 6,000 4,000 10,100 69,200 100,000 30,000 37,800 $297,100 SWEET INC. INCOME STATEMENT FOR THE YEAR ENDING DECEMBER 31, 2020 Sales revenue Cost of goods sold Gross profit Operating expenses Operating income Interest expense $11,400 $336,150 174,100 162,050 120,800 41,250 Income before tax Income tax expense Net income 31,750 6,350 $25,400 Additional information: 1. Dividends in the amount of $6,100 were declared and paid during 2020. 2. Depreciation expense and amortization expense are included in operating expenses. 3. No unrealized gains or losses have occurred on the investments during the year. 4. Equipment that had a cost of $20,200 and was 70% depreciated was sold during 2020. 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. SWEET INC. Statement of Cash Flows Adjustments to reconcile net income to
