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Fred Slezak presented the following comparative balance sheet: FRED SLEZAK CORPORATION Comparative Balance Sheet December 31, 20X5 and 20X4 Assets 20X5 20X4 Current assets Cash
Fred Slezak presented the following comparative balance sheet: | ||||||||
FRED SLEZAK CORPORATION | ||||||||
Comparative Balance Sheet | ||||||||
December 31, 20X5 and 20X4 | ||||||||
Assets | 20X5 | 20X4 | ||||||
Current assets | ||||||||
Cash | $ 664,000 | $ 9,000 | ||||||
Accounts receivable | 375,000 | 345,000 | ||||||
Inventories | 150,000 | 160,000 | ||||||
Prepaid expenses | 35,000 | 25,000 | ||||||
Total current assets | $ 1,224,000 | $ 539,000 | ||||||
Property, plant, & equipment | ||||||||
Land | $ 300,000 | $ 400,000 | ||||||
Building | 700,000 | 700,000 | ||||||
Equipment | 530,000 | 450,000 | ||||||
$ 1,530,000 | $ 1,550,000 | |||||||
Less: Accumulated depreciation | (300,000) | (270,000) | ||||||
Total property, plant, & equipment | $ 1,230,000 | $ 1,280,000 | ||||||
Total assets | $ 2,454,000 | $ 1,819,000 | ||||||
Liabilities | ||||||||
Current liabilities | ||||||||
Accounts payable | $ 112,000 | $ 119,000 | ||||||
Interest payable | 2,000 | - | ||||||
Total current liabilities | $ 114,000 | $ 119,000 | ||||||
Long-term liabilities | ||||||||
Long-term note payable | 80,000 | - | ||||||
Total liabilities | $ 194,000 | $ 119,000 | ||||||
Stockholders' equity | ||||||||
Common stock ($1 par) | $ 700,000 | $ 600,000 | ||||||
Paid-in capital in excess of par | 800,000 | 400,000 | ||||||
Retained earnings | 760,000 | 700,000 | ||||||
Total stockholders' equity | $ 2,260,000 | $ 1,700,000 | ||||||
Total liabilities and equity | $ 2,454,000 | $ 1,819,000 | ||||||
Additional information about transactions and events occurring in 20X5 follows: | ||||||||
Dividends of $55,000 were declared and paid. | ||||||||
Accounts payable and accounts receivable relate solely to purchases and sales of inventory. Prepaid items related only to advertising expenses. | ||||||||
The decrease in land resulted from the sale of a parcel at a $45,000 loss. No land was purchased during the year. Equipment was purchased during the year in exchange for a promissory note payable. No equipment was sold. | ||||||||
The increase in paid-in capital resulted from issuing additional shares for cash. | ||||||||
The income statement for the year ending December 31, 20X5, included the following key amounts: | ||||||||
Sales | $ 2,000,000 | |||||||
Cost of goods sold | 1,200,000 | |||||||
Salaries expense | 400,000 | |||||||
Advertising expense | 150,000 | |||||||
Depreciation expense | 30,000 | |||||||
Utilities expense | 15,000 | |||||||
Interest expense | 5,000 | |||||||
Loss on sale of land | 45,000 | |||||||
Income tax expense | 40,000 | |||||||
Net income | 115,000 | |||||||
Prepare Fred Slezak's statement of cash flows for the year ending 20X5. Use the indirect approach, and include required supplemental information about cash paid for interest and taxes. |
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