In addition to these instructions, I have also provided an Excel spreadsheet with the beginning and...

Transcribed Image Text:

In addition to these instructions, I have also provided an Excel spreadsheet with the beginning and ending balances for the Arduous Company's 2021 balance sheet and their 2021 income statement. Using the financial statements and the additional information below, prepare Arduous' Statement of Cash Flows in good form, along with supporting calculations. For the operating activities section you may use either the Direct or the Indirect method. If using the Indirect method you are not required to prepare the reconciling schedule. Additional information (this is also included in the excel spreadsheet). a. A building that originally cost $50,000, with accumulated depreciation of $40,000, was sold for $7,000 b. Land was acquired by issuing a $30,000, 13% note payable c. On January 1, 2021, $25,000 of bonds payable were issued at their face value. d. On January 2, 2021, a 5% stock dividend was issued (1,000 shares). The market price of the $10 par value stock was $16. Assume any changes in account balances that are not related to an income statement item or for which additional information is not provided resulted from a cash transaction (for example if the balance in the T/S account increased and you have no additional information, assume you purchased T/S for cash). Miscellaneous Definition of "in good form": 1. The statement 'looks like a financial statement' - it does not have debit and credit columns, it has dollar signs, relevant account names, etc. 2. The statement is arranged according to activity, in the following order - Operating Activities, Investing Activities, & Financing Activities, with the appropriate cash transactions in each. 3. Each of the activities presents a subtotal for cash inflows or outflows for that section. 4. The statement 'reconciles' the change in cash during the year by including the net change in cash added to (or subtracted from) beginning cash to arrive at ending cash (and the numbers should equal the change in cash on the balance sheet). 5. Cash payments and receipts for the same item (i.e. purchases and sales of equipment) should not be netted into one item. 6. Long term non-cash transactions (i.e. purchase of building with a note payable should be included as a note at the bottom of the statement, including amounts). To maximize your score - I will first be looking at the statement. If it is correct that's great. If it is not, supporting computations for the different amounts will provide extra credit. Supporting computations can be - completing the excel worksheet, submitting journal entries that also show amount calculations, submitting some other easy to follow schedule showing how the cash amounts were In addition to these instructions, I have also provided an Excel spreadsheet with the beginning and ending balances for the Arduous Company's 2021 balance sheet and their 2021 income statement. Using the financial statements and the additional information below, prepare Arduous' Statement of Cash Flows in good form, along with supporting calculations. For the operating activities section you may use either the Direct or the Indirect method. If using the Indirect method you are not required to prepare the reconciling schedule. Additional information (this is also included in the excel spreadsheet). a. A building that originally cost $50,000, with accumulated depreciation of $40,000, was sold for $7,000 b. Land was acquired by issuing a $30,000, 13% note payable c. On January 1, 2021, $25,000 of bonds payable were issued at their face value. d. On January 2, 2021, a 5% stock dividend was issued (1,000 shares). The market price of the $10 par value stock was $16. Assume any changes in account balances that are not related to an income statement item or for which additional information is not provided resulted from a cash transaction (for example if the balance in the T/S account increased and you have no additional information, assume you purchased T/S for cash). Miscellaneous Definition of "in good form": 1. The statement 'looks like a financial statement' - it does not have debit and credit columns, it has dollar signs, relevant account names, etc. 2. The statement is arranged according to activity, in the following order - Operating Activities, Investing Activities, & Financing Activities, with the appropriate cash transactions in each. 3. Each of the activities presents a subtotal for cash inflows or outflows for that section. 4. The statement 'reconciles' the change in cash during the year by including the net change in cash added to (or subtracted from) beginning cash to arrive at ending cash (and the numbers should equal the change in cash on the balance sheet). 5. Cash payments and receipts for the same item (i.e. purchases and sales of equipment) should not be netted into one item. 6. Long term non-cash transactions (i.e. purchase of building with a note payable should be included as a note at the bottom of the statement, including amounts). To maximize your score - I will first be looking at the statement. If it is correct that's great. If it is not, supporting computations for the different amounts will provide extra credit. Supporting computations can be - completing the excel worksheet, submitting journal entries that also show amount calculations, submitting some other easy to follow schedule showing how the cash amounts were