Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Following are selected balance sheet accounts of Despacito Corp. at December 31, 2019 and 2018, and the increases or decreases in each account from 2018

Following are selected balance sheet accounts of Despacito Corp. at December 31, 2019 and 2018, and the increases or decreases in each account from 2018 to 2019. Also presented is selected income statement information for the year ended December 31, 2019, and additional information.

Increase

Selected balance sheet accounts 2019 2018 (Decrease)

Assets:

Accounts receivable $100,000 $ 94,000 6,000

Inventory 55,000 70,000 (15,000)

Prepaid Expenses 30,000 25,000 5,000

Property, plant, and equipment 400,000 200,000 200,000

Accumulated depreciation (250,000) (180,000) 70,000

Deferred tax asset 30,000 40,000 (10,000)

Liabilities and stockholders equity:

Accounts payable 400,000 420,000 (20,000)

Interest payable 8,000 9,000 (1,000)

Accrued expenses payable 10,000 7,000 3,000

Dividends payable 20,000 25,000 (5,000)

Taxes payable 45,000 55,000 (10,000)

Deferred tax liability 18,000 13,000 5,000

Bonds payable 180,000 100,000 80,000

Discount on bonds payable 16,000 8,000 8,000

Common stock, $1 par 40,000 10,000 30,000

Additional paid-in capital 180,000 50,000 130,000

Retained earnings 1,010,000 1,000,000 10,000

Selected income statement information for the year ended December 31, 2019

Sales revenue $600,000

Cost of goods sold 200,000

Operating expenses 100,000

Interest expense 10,000

Depreciation 100,000

Loss on sale of equipment 10,000

Gain on retirement of bonds 15,000

Tax expense 50,000

Net income 80,000

Additional information

-Accounts receivable relates to sales of merchandise.

-During 2019, equipment costing $80,000 was sold for cash.

-During 2019, $60,000 face value bonds payable were issued at $50,000 in exchange for property plant, and equipment. In addition, bonds were issued at par for cash.

-During 2019, $50,000 of bonds payable originally issued at par were retired

-During 2019, 10,000 shares of $1 par common stock were issued for cash.

-During 2019, issued 20,000 shares of $1 par common stock as a result of a stock dividend. The fair value of the shares was $80,000.

REQUIRED: Item 1-11 represents activities that will be reported in Despacitos statement of cash flows for the year ended December 31, 2019. Determine the amount that should be reported in Despacitos 2019 statement of cash flows. Enter your answers in the space below

Items to be answered:

  1. Cash collections from customers _____________

  1. Cash paid to suppliers ____________

  1. Cash paid for operating expenses ___________

  1. Cash paid for interest ____________

  1. Payments for purchase of property plant and equipment _______________

  1. Proceeds from sale of equipment _____________

  1. Cash dividends paid _____________

  1. Cash received from issuance of bonds ________________

  1. Cash paid for retirement of bonds __________________

  1. Cash received from issuance of common stock _______________

  1. Cash paid for taxes ______________________

Explain how you got the answer.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Credit Repair How To Repair Your Credit All By Yourself A Beginners Guide To Better Credit

Authors: Ernie Braveboy

1st Edition

1981032878, 978-1981032877

More Books

Students also viewed these Accounting questions

Question

suggest a range of work sample exercises and design them

Answered: 1 week ago