Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

LAG Network Inc'.s balance sheet and income statement are as follows: Income Statement Sales $928,600 Cost of goods sold 556,200 Gross profit 372,400 Operating expenses:

LAG Network Inc'.s balance sheet and income statement are as follows: Income Statement Sales $928,600 Cost of goods sold 556,200 Gross profit 372,400 Operating expenses: Depreciation expense $25,200 Other expenses 232,800 Total operating expenses 258,000 Profit from operations $ 114,400 Income taxes 18,600 Profit $ 95,800

Additional information regarding LAG Network Inc'.s activities during 2020. a. Equipment is purchased for $16,000 cash. b. 10,200 common shares are issued for cash at $2.50 per share. c. Declared and paid $50,800 of cash dividends during the year. Other information regarding LAG Network Inc. a. All sales are credit sales. b. All credits to accounts receivable are receipts customers. c. All purchases of merchandise are on credit. d. All debits to account payable result from payments for merchandise. e. Other operating expenses are cash expenses. f. The only decrease in income payable is for payment of taxes.

Prepare a statement of cash flow for 2020 using the direct method to reports the cash inflows and outflows from operating activities.

LAG Network Inc. Comparative Balance Sheet Information Assets December 31 2020 2019 Cash $81,190 $54,400 Accounts receivable 42,400 37,600 Merchandise inventory 284,710 246,800 Equipment 154,400 138,400 Accumulated depreciation (71,800) (46,600) Total assets $490,000 $431,600

Liabilities and equity Accounts payable $ 31,200 $43,800 Income taxes payable 11,600 10,200 Common shares 363,000 337,500 Retained earnings 85,100 40,100 Total liabilities and equity $490,900 $431,600

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Intermediate Accounting Volume 1

Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield, Irene M. Wiecek, Bruce J. McConomy

13th Canadian Edition

1119740460, 978-1119740469

More Books

Students also viewed these Accounting questions

Question

What functions are provided by SNMP?

Answered: 1 week ago

Question

Did you include a prominent, attention-grabbing headline?

Answered: 1 week ago

Question

Did you follow BANGPP design checklist to review the layout?

Answered: 1 week ago