PHAROAHLTD. Statement of Financial Position December 31 Assets 2021 2020 Cash $58,000 $25,000 Accounts receivable 89,000 86,000 Inventory 174,000 183,500 Estimated invertory returns 7.000 3,000 Long-term investments 70.000 100,000 275,000 Equipment Accumulated depreciation (73,000 200,000 (32,000) $565,500 Total assets $600,000 Liabilities and Shareholders' Equity Accounts payable $23,000 $ 42,500 Liabilities and Shareholders' Equity Accounts payable $23,000 $42,500 10,000 4,000 177.000 204,000 Refund liability Bank loan payable (noncurrent) Common shares Retained earnings Total liabilities and shareholders equity 195,000 175.000 195.000 140,000 $600,000 $565,500 Additional information pertaining to 2021 1. Net income was $114,000 Sales were $996,000 2 3 Cost of goods sold was $759.000 4. Operating expenses were $50,000, exclusive of depreciation expense. 5 Depreciation expense was $41.000, Total abilities and shareholders equity $600.000 $565.500 Additional information pertaining to 2021 1 Net income was $114,000. 2 3 4 5 6 Sales were 5996,000 Cost of goods sold was $759.000, Operating expenses were $50,000, exclusive of deprciation expense. Depreciation expense was $41.000 Interest expense was $12,000, Income tax expense was $25,000 Long-term investments were sold at a gain of $5,000, No equipment was sold during the year, $27,000 of the bank loan was repaid during the year. 7 8 9. 10. 11. Common shares were issued for $20.000, Prepare a statement of cash flows using the Indirect method. (Show amounts that decrease cash flow with either a-signes -45,000, or in parenthesis eg. (45,000)) PHAROAH LTD. Statement of Cash Flows-Indirect Method Year Ended December 31, 2021 Cash flows from operating activities Net income Adjustments to reconcile net income to Net cash provided by operating activities Depreciation expense $ > Gain on sale of long-term investments tarehe Depreciation expense Gain on sale of long-term investments Increase in accounts receivable Decrease in inventory Decrease in accounts payable DO LINE e Textbook and Media Attempts: 1 of 15 used Sibel