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Financial statements for Discovery Company follow: 20x3 $ 42,700 1,307,600 1,016,400 2,366,700 400,400 3,227,200 (2,343,600) 259,000 $ 3,909,700 259,0 DISCOVERY COMPANY Statement of Financial Position
Financial statements for Discovery Company follow: 20x3 $ 42,700 1,307,600 1,016,400 2,366,700 400,400 3,227,200 (2,343,600) 259,000 $ 3,909,700 259,0 DISCOVERY COMPANY Statement of Financial Position As of 31 December 2084 Assets Current assets: Cash $ 49,000 Accounts receivable 1,364,100 Inventory 1,112,800 Total current assets 2,525,900 Land 927,300 Plant and equipment 4,663,100 Less: Accumulated depreciation (2,376,200) Patents 246,400 Total assets $ 5,986,500 Liabilities and shareholders' equity Liabilities: Current liabilities: Accounts payable 768,200 Salaries and wages payable 121,100 Income tax payable 283,300 Total current liabilities 1,172,600 Long-term debt 2,938,400 Total liabilities 4,111,000 Shareholders' equity: Common shares, no-par 484,900 Retained earnings 1,390,600 Total shareholders' equity 1,875,500 Total liabilities and shareholders' equity $ 5,986,500 $ 844,200 112,200 264,500 1,220,900 1,587,400 2,808,300 480,400 621,000 1,101,400 $ 3,909,700 9,872,900 DISCOVERY COMPANY Statement of Comprehensive Income For the year ended 31 December 20X4 Sales revenue Less expenses: Cost of goods sold $5,446,100 Selling and administrative expenses 1,454,200 Depreciation and amortization 493,700 Rent expense 40,100 Miscellaneous expenses 379,800 Total expenses Other revenues and expenses: Interest expense 92,400 Gain on sale of equipment (16,100) Loss on debt retirement 29,600 Earnings before income tax Income tax expense Net earnings and comprehensive income 7,813,900 105,900 1,953, 100 831,400 $1,121,700 Additional information: a. The company sold equipment that had an original cost of $778,700 and a net book value of $330,200. Other equipment was purchased for cash. Patent amortization was $10,500. b. Long-term debt with a face value of $1,050,000 was repaid during the year and other long-term debt was issued at a lower interest rate. c. The company issued shares for land during the period. Other common shares were retired (bought back and cancelled) at book value. d. Assume unexplained changes in accounts stem from logical transactions. val Required: 1. Prepare the SCF, using the indirect method. Use the two-step method for operations. (Deductible amounts and Cash outflows should be indicated with minus sign.) Statement of Cash Flows For the year ended 31 December 20X4 Operating activities: Adjustments for non-cash items: Total adjustment Changes in net working capital: Investing activities: E Financing activities: Cash balance beginning of the year Cash balance end of the year 2. Prepare the SCF, using the direct method to present cash flows in the operating activities section. outflows should be indicated with minus sign.) DISCOVERY COMPANY Statement of Cash Flows For the year ended 31 December 20X4 Operating activities: Investing activities: Financing activities: Cash balance beginning of the year Cash balance end of the year
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