Please help with the wrong ones, thank you!
Statement of Cash Flows (Indirect Method) The Sky Company's income statement and comparative balance sheets as of December 31 of 2019 and 2018 follow: SKY COMPANY Income Statement For the Year Ended December 31, 2019 Sales Revenue $800,000 Dividend Income 19,000 819,000 Cost of Goods Sold $440,000 Wages and Other Operating Expenses 130,000 Depreciation Expense 39,000 Patent Amortization Expense 7,000 Interest Expense 13,000 Income Tax Expense 30,000 Loss on Sale of Equipment 5,000 Gain on Sale of Investments (10,000) 654,000 Net Income $165,000 SKY COMPANY Balance Sheets Dec. 31, 2019 Dec. 31, 2018 Assets $63,000 45,000 100,000 10,000 Cash and Cash Equivalents Accounts Receivable Inventory Prepaid Expenses Long-term Investments-Available for Sale Fair Value Adjustment to Investments Land Buildings Accumulated Depreciation - Buildings Equipment Accumulated Depreciation Equipment Patents 190,000 445,000 (91,000) 179,000 (42,000) 50,000 $29,000 35,000 77,000 6,000 50,000 7,000 100,000 350,000 (75,000) 225,000 (46,000) 32,000 $790,000 $949,000 $21,000 $18,000 5,000 6,000 8,000 12,000 135,000 Total Assets Liabilities and Stockholders' Equity Accounts Payable Interest Payable Income Tax Payable Bonds Payable Preferred Stock ($100 par value) Common Stock ($5 par value) Paid-in-capital in Excess of Par Value-Common Retained Earnings Unrealized Gain on Investments Total Liabilities and Stockholders' Equity 100,000 379,000 133,000 167,000 130,000 75,000 364,000 124,000 55,000 7,000 $790,000 $949,000 During the year, the following transactions occurred: 1. Sold long-term investments costing $50,000 for $60,000 cash. Unrealized gains totaling $7,000 related to these investments had been recorded in earlier years. At year-end, the fair value adjustment and unrealized gain account balances were eliminated. 2. Purchased land for cash. 3. Capitalized an expenditure made to improve the building. 4. Sold equipment for $14,000 cash that originally cost $46,000 and had $27,000 accumulated depreciation. 5. Issued bonds payable at face value for cash. 6. Acquired a patent with a fair value of $25,000 by issuing 250 shares of preferred stock at par value. 7. Declared and paid a $53,000 cash dividend. 8. Issued 3,000 shares of common stock for cash at $8 per share. 9. Recorded depreciation of $16,000 on buildings and $23,000 on equipment. Required a. Calculate the change in cash and cash equivalents that occurred during 2019. b. Prepare a statement of cash flows using the indirect method. a. Change in Cash during 2019 $ Statement of Cash Flows For Year Ended December 31, 2019 Cash Flow from Operating Activities Net Income Add (deduct) items to convert net income to cash basis Depreciation Patent Amortization $ 165,000 Increase Loss on Sale of Equipment Gain on Sale of Investments Accounts Receivable Inventory Prepaid Expenses Accounts Payable Increase 39,000 7,000 5,000 (10,000) 3,000 * (23,000) (4,000) 3,000 (12,000) x (34,000) * 162,000 x Increase Increase Interest Payable Increase Decrease 60,000 (90,000) (95,000) 14,000 (92,000) * Income Tax Payable Cash Flow Provided by Operating Activities Cash Flow from Investing Activities Sale of Investments Purchase of Land Improvements to Building Sale of equipment Cash Used by Investing Activities Cash Flow from Financing Activities Issuance of Bonds Payable Issuance of Common Stock Payment of Dividends Cash Used by Financing Activities NetChange in Cash Cash at Beginning of Year Cash at End of Year 5,000 15,000 X (53,000) (36,000) 34,000 29,000 63,000
