Instructions Labels and Amount Descriptions T-Accounts Statement of Cash Flows Instructions Financial statements for McGinnis Company as well as additional information relevant to cash flows during the period are given below. McGinnis Company Income Statement For Year Ended December 31, 20-2 1 Net sales $1,750,000.00 890,000,00 $860,000.00 590,600.00 $269,400.00 2 Cost of goods sold 5 Gross profit 4 Operating expenses 5 Operating income 6 Other revenues and expenses: Interest revenue Interest expense 9 Gain on sale of office equipment 10 Income before taxes 11 Income tax expense 7 $2,700.00 (750.00) 15,000.00 16,950.00 $286,350.00 95,000.00 $191,350.00 12 Net income McGinnis Company Statement of Retained Earnings For Year Ended December 31, 20-2 $320,000.00 $191,350.00 1 Retained earnings, January 1, 20-2 2 Net income 3 Less dividends Net increase in retained earnings S Retained earnings, December 31, 20-2 40,000.00 151,350.00 $471,350.00 McGinnis Company Comparative Balance Sheet December 31, 20-2 and 20-1 20-2 20-1 INCREASE (DECREASE) Assets Current assets Cash $57.900.00 5 Government notes $103.420,00 5,400.00 Accrued interest receivable (10.600.00 25000 890.00 550520.00 16,000.00 580.00 309.200.00 95.800.00 37000.00 300,600.00 580,500.00 65,000.00 (8.600.00) 34,500.00 55,000.00 151.450.00 10 $1.055,550.00 3904.10000 $420,000.00 1 Accounts receivable (net) Merchandise Inventory Supplies and prepayments Total current assets 11 Property, plant, and equipment: 1 Store equipment 11 Less accumulated depreciation store equipment 24 Delivery equipment 15 Less accumulated depreciation delivery equipment Office equipment Less accumulated depreciation office equipment Total property, plant, and equipment 140,000.00 5560,000.00 120,000.00 440,000.00 90,000.00 350,000.00 50,000.00 $350,000.00 100,000.00 5430,000.00 150,000.00 $520,000.00 280,000.00 210,000.00 30,000.00 120,000.00 $380,000.00 17 30,500.00 100.500.00 279,500.00 289,500.00 1,009,500.00 160000.00 70,000.00 190.000.00 11 819,500.00 15 Total assets $2.065,050.00 $1,723,60000 341,450.00 Labilities Current liabilities in Notes payable $117.000.00 58.000.00 $109,000.00 185,000.00 135.000.00 Accounts payable 34 Income tax payable (50,000.00 10,000.00 25,000.00 15,000.00 21 Accrued and withheld payroll taxes 15,800.00 13.400.00 7,400.00 Accrued interest payable 900.00 1,200.00 22 Total current liabities 5795.00.00 (500.00) 129,900.00) $325,600.00 10 $100,000.00 18 Stockholders' Equity Common stock ($10 par, 400,000 shares authorized Issued: 80.000 in 20-2 and 70,000 in 20-1) 11 Pald-in capital in excess of par.common stock - Retained camnings 33 Total stockholders' equity 5800,000.00 500,000.00 $700,000.00 380,000.00 320,000.00 120,000.00 471,350.00 151,350.00 1,771,350.00 1.400,000.00 571,35000 Total abilities and stockholders equity $2.065.050.00 $1,723,500.00 341.450.00 Additional information: 1. Office equipment was sold in 20-2 for $35,000. Additional information on the office equipment sold is provided below. Cost $100,000 Accumulated depreciation (80,000) Book value $20,000 Market value 35,000 Gain on sale $15,000 2. Depreciation expense for the year was $70,000. 3. The following purchases were made for cash: Store equipment $140,000 Delivery equipment 100,000 Office equipment 32,000 $272,000 4. Declared and paid cash dividends of $40,000. 5. Issued 10,000 shares of $10 par common stock for $22 per share. 6. Acquired additional office equipment by issuing a note payable for $8,000. Required: Prepare a statement of cash flows explaining the change in cash and cash equivalents for the year onded December 31, 20-2. abels and Amount Descriptions Labels December 31, 20-2 For Year Ended December 31, 20-2 Amount Descriptions Acquired store equipment by issuing a note payable Cash paid for interest Cash paid for income taxes Decrease in accounts payable Decrease in accounts receivable Decrease in accrued interest receivable Decrease in accrued and withheld payroll taxes Decrease in accrued interest payable Decrease in income tax payable Decrease in merchandise Inventory Decrease in supplies and prepayments Depreciation expense Gain on sale of office equipment Increase in accounts payablo Increase in accounts receivable Increase in accrued interest receivable Increase in accrued and withheld payroll taxes Increase in accrued interest payable Increase in income tax payablo Increase in merchandise inventory Increase in supples and prepayments Issued common stock Loss on sale of office equipment Net cash provided by financing activities Net cash provided by Investing activities Net cash provided by operating activities Net cash used by financing activities Net cash used by investing activities Net cash used by operating activities Not income Net increase (decrease) in cash and cash equivalents Net loss Paid cash dividends Purchased delivery equipment Purchased office equipment Purchased store equipment Sold office equipment Prepare T Accounts to aid in the preparation of the Indirect Method Statement of Cash Flows: (88: Beginning Balance, E8: Ending Balance) TAccount Instructions Accrued Interest Recelvable BB 580 (2) EB 830 Accounts Receivable BB 309.200 (3) EB 300,600 Merchandise Inventory BB 495,800 (4) 4) EB 580,300 Supplies and Prepayments BB 32,000 Supplies and Prepayments 32,000 (5) 65,000 Store Equipment 420,000 (12) 560,000 Accumulated Depreciation Store Equipment 90,000 (11) 120,000 Office Equipment 380,000 (14) (10) (17) 320,000 Accumulated Depreciation Office Equipment 100,500 (10) (11) 30,500 Delivery Equipment 330,000 (13) 430000 Accumulated Depreciation-Delivery Equipment 120,000 (11) 150,000 Notes Payable 109,000 (17) 117,000 y Manag. 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Class - quinster eBook Accounts Payable BB 185,000 (6) 6 EB 135,000 Income Tax Payable BB 15,000 (7) EB 25,000 Accrued and withhold Payroll Taxos BB 13,400 (8) EB 15,800 Accrued Interest Payable BB 1,200 (9) EB 900 Book Common Stock 700,000 (15) 800,000 Paid-In Capital in Excess of Par-Common Stock 380,000 (15) 500,000 Retained Earnings 320,000 (16) (1) ( 471,350 Prepare a statement of cash flows explaining the change in cash and cash equivalents for the year ended December 31, 20-2 Statement of Cash Flows Instructions McGinnis Company Statement of Cash Flows (Label) 1 Cash flows from operating activities: 2 3 Adjustments for changes in current assets and abilities related to operating activities: 4 5 6 7 8 9 10 11 Noncash expenses and other adjustments: 13 14 15 16 Cash flows from Investing activities: 17 18 19 20 21 I 22 Cash flows from financing activities: 25 24 25 26 27 Cash and cash equivalents, January 1, 20-2 28 Cash and cash equivalents, December 31, 20-2 29 Schedule of Noncash Investing and Financing Activities: 30 31 Supplemental Disclosures of Cash Flow Information: Cash paid for interest Cash paid for income taxes 32 33