Grouper Inc., a greeting card company that follows ASPE, had the following statements prepared as at December 31, 2020: GROUPER INC. Comparative Statement of Financial Position December 31 2020 2019 Cash $51,820 $25,130 Accounts receivable 58,050 51,190 Inventory 39,960 60,150 Prepaid rent 5,190 4,040 Equipment 159,030 130, 130 Accumulated depreciation-equipment (35,190) (25,040) Goodwill 38,000 70,000 Total assets $316,860 $315,600 Accounts payable $46,230 Income tax payable 3,960 Salaries and wages payable 8,130 Short-term loans payable 8,050 Long-term loans payable 78,000 Common shares 130,000 Retained earnings 42,490 Total liabilities and shareholders' equity $316,860 $40,130 6,150 4,130 10,190 89,000 130,000 36,000 315,600 GROUPER INC. Income Statement Year Ending December 31, 2020 Sales revenue $340,350 Cost of goods sold 165,000 Gross margin 175,350 Operating expenses 120,000 Operating income 55,350 Interest expense $12,200 Impairment loss-goodwill 32,000 Gain on disposal of equipment (2,700) 41,500 Income before income tax 13,850 Income tax expense 4,160 Net income $9,690 Additional information: 1. Dividends on common shares in the amount of $3,200 were declared and paid during 2020. 2. Depreciation expense is included in operating expenses, as is salaries and wages expense of $74,000. 3. Equipment with a cost of $30,000 that 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.g. (15,000).) Grouper Inc. Statement of Cash Flows (Indirect Method) For the Year Ended December 31, 2020 TCash Flows from Operating Activities 9,690 TNet Income / (Loss) Adjustments to reconcile net income/loss to net cash provided by operating activities: T Depreciation Expense 51,000 T Impairment Loss, Goodwill 32,000 T Gain on Disposal of Equipment (2,700) T Increase in Accounts Receivable (6,860) T Decrease in Inventory 20,190 Increase in Prepaid Rent (1,150) PPT Increase in Accounts Payable 6,100 Increase in Salaries and Wages Payable 4,000 T Decrease in Income Tax Payable (2,190) Total Adjustments 100,390 TNet Cash Provided by Operating Activities 110,080 TCash Flows from Investing Activities ment T Proceeds on Sale of Equipment 21,000 T Purchase of Equipment (28,900) TNet Cash Used by Investing Activities (7,000) TCash Flows from Financing Activities T Principal Payments on Short-Term Loans (2,140) T Principal Payments on Long-Term Loans (11,000) T Dividends paid (3,200) TNet Cash Used by Financing Activities (16,340) TNet Increase in Cash 86,740 TCash, January 1, 2020 25,130 T Cash, December 31, 2020 111,870
