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*Please Help Answer Properly, Will Give Thumbs Up! The statement of income and unclassified statement of financial position for Sandhill, Inc. follow: SANDHILL, INC. Statement
*Please Help Answer Properly, Will Give Thumbs Up!
The statement of income and unclassified statement of financial position for Sandhill, Inc. follow:
SANDHILL, INC. Statement of Financial Position December 31 | |||||||
---|---|---|---|---|---|---|---|
Assets | 2021 | 2020 | |||||
Cash | $97,600 | $48,000 | |||||
Trading investments | 130,000 | 114,000 | |||||
Accounts receivable | 75,500 | 40,000 | |||||
Inventory | 120,100 | 92,000 | |||||
Estimated inventory returns | 3,000 | 2,500 | |||||
Prepaid expenses | 18,800 | 27,200 | |||||
Equipment | 278,500 | 254,000 | |||||
Accumulated depreciation | (47,500 | ) | (52,000 | ) | |||
Total assets | $676,000 | $525,700 | |||||
Liabilities and Shareholders Equity | |||||||
Accounts payable | $100,000 | $75,700 | |||||
Property tax payable | 10,900 | 6,400 | |||||
Refund liability | 1,100 | 800 | |||||
Bank loan payablecurrent portion | 70,000 | 105,300 | |||||
Bank loan payablenoncurrent portion | 30,000 | 30,000 | |||||
Common shares | 220,000 | 195,000 | |||||
Retained earnings | 244,000 | 112,500 | |||||
Total liabilities and shareholders equity | $676,000 | $525,700 |
SANDHILL, INC. Statement of Income Year Ended December 31, 2021 | ||||||
Sales | $571,200 | |||||
Cost of goods sold | 189,300 | |||||
Gross profit | 381,900 | |||||
Operating expenses | 116,480 | |||||
Income from operations | 265,420 | |||||
Other income and expenses | ||||||
Unrealized gain on trading investments | $16,000 | |||||
Interest expense | (4,780 | ) | 11,220 | |||
Income before income tax | 276,640 | |||||
Income tax expense | 43,000 | |||||
Net income | $233,640 |
Additional information regarding 2021:
1. | Prepaid expenses and property tax payable relate to operating expenses. | |
2. | New equipment costing $82,000 was purchased for $23,700 cash and a $58,300 long-term bank loan payable. | |
3. | Old equipment having an original cost of $57,500 was sold for $1,700. | |
4. | Accounts payable relate to inventory suppliers. | |
5. | Some of the bank loan was repaid during the year. | |
6. | A dividend was paid during the year. | |
7. | Operating expenses include $46,600 of depreciation expense and a $4,700 loss on disposal of equipment. | |
8. | Common shares were issued for $42,000 cash during the year and some common shares were bought back and retired at the cost they were originally issued at. |
(a) Prepare the statement of cash flows, using the indirect method. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)
SANDHILL, INC. Statement of Cash Flows Year Ended December 31, 2021 $ Adjustments to reconcile net income to $ >
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