Question
Freaky Deaky Company provided the following income statements and statements of financial position for 2021. Freaky Deaky Company Income Statement For the Year Ended March
Freaky Deaky Company provided the following income statements and statements of financial position for 2021. Freaky Deaky Company Income Statement For the Year Ended March 31, 2021
Sales revenue $3,855,000
Cost of goods sold 1,905,000
Gross margin 1,950,000
Operating expenses
Salary expense $335,000
Depreciation expense 95,000
Interest expense 150,000 Administrative expenses 525,000 Total operating expenses 1,005,000 Income from operations 845,000 Other items Gain on sale of assets 10,000 Income before income tax 855,000 Income tax expense 345,000 Net income $ 510,000 Freaky Deaky Company Statement of Financial Position At March 31, Assets 2021 2020 Current Cash $ 285,000 $ 335,000 Accounts receivable 350,000 400,000 Inventory 290,000 240,000 Prepaid insurance 55,000 35,000 Total current assets 980,000 1,010,000 Property, equipment and vehicles 650,000 590,000 Accumulated amortization (165,000) (130,000) Total non-current assets 485,000 460,000 $1,465,000 $1,470,000 Liabilities Current Accounts payable $ 60,000 $ 50,000 Wages payable 15,000 20,000 Unearned revenue 50,000 35,000 Income taxes payable 55,000 35,000 Total current liabilities 180,000 140,000 Bonds payable 490,000 575,000 Total liabilities 670,000 715,000 Shareholders Equity Common shares 365,000 285,000 Retained earnings 430,000 470,000 $1,465,000 $1,470,000 Additional information provided by the company is as follows: 1. Property, plant and equipment originally costing $90,000 was sold for $40,000. 2. New equipment costing $150,000 was purchased during the year. 3. New shares were issued for $80,000 during the year. Required: Prepare the cash flow statement for the 2021 financial statement package, using the indirect method
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