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P23.1 (LO 2, 4 ) (SCFIndirect Method) The following are Sullivan Corp.'s comparative balance sheet accounts at December 31, 2020 and 2019, with a column

P23.1

(LO 2, 4 ) (SCFIndirect Method) The following are Sullivan Corp.'s comparative balance sheet accounts at December 31, 2020 and 2019, with a column showing the increase (decrease) from 2019 to 2020.

Comparative Balance Sheets

Increase

2020

2019

(Decrease)

Cash

$815,000

$700,000

$115,000

Accounts receivable

1,128,000

1,168,000

(40,000)

Inventory

1,850,000

1,715,000

135,000

Property, plant, and equipment

3,307,000

2,967,000

340,000

Accumulated depreciation

(1,165,000)

(1,040,000)

(125,000)

Investment in Myers Co.

310,000

275,000

35,000

Loan receivable

250,000

250,000

Total assets

$6,495,000

$5,785,000

$710,000

Accounts payable

$1,015,000

$955,000

$60,000

Income taxes payable

30,000

50,000

(20,000)

Dividends payable

80,000

100,000

(20,000)

Lease liability

400,000

400,000

Common stock, $1 par

500,000

500,000

Paid-in capital in excess of parcommon stock

1,500,000

1,500,000

Retained earnings

2,970,000

2,680,000

290,000

Total liabilities and stockholders' equity

$6,495,000

$5,785,000

$710,000

Additional information:

  • 1.On December 31, 2019, Sullivan acquired 25% of Myers Co.'s common stock for $275,000. On that date, the carrying value of Myers's assets and liabilities, which approximated their fair values, was $1,100,000. Myers reported income of $140,000 for the year ended December 31, 2020. No dividend was paid on Myers's common stock during the year.
  • 2.During 2020, Sullivan loaned $300,000 to TLC Co., an unrelated company. TLC made the first semiannual principal repayment of $50,000, plus interest at 10%, on December 31, 2020.
  • 3.On January 2, 2020, Sullivan sold equipment costing $60,000, with a carrying amount of $38,000, for $40,000 cash.
  • 4.On December 31, 2020, Sullivan entered into a capital lease for an office building. The present value of the annual rental payments is $400,000, which equals the fair value of the building. Sullivan made the first rental payment of $60,000 when due on January 2, 2021.
  • 5.Net income for 2020 was $370,000.
  • 6.Sullivan declared and paid the following cash dividends for 2020 and 2019.

    2020

    2019

    Declared

    December 15, 2020

    December 15, 2019

    Paid

    February 28, 2021

    February 28, 2020

    Amount

    $80,000

    $100,000

Instructions

Please identify the major note disclosure requirements per ASC Accounting Standards for a Statement of Cash Flow for this problem.

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