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Prepare a statement of cash flows for Cheng Inc. using the DIRECT method. Cheng Inc. Comparative Balance Sheets December 31 Assets 2020 2019 Cash $80,800
Prepare a statement of cash flows for Cheng Inc. using the DIRECT method.
Cheng Inc. Comparative Balance Sheets December 31 Assets 2020 2019 Cash $80,800 $48,400 Accounts receivable 92,800 33,000 Inventory 117,500 102,850 Prepaid expenses 28,400 26,000 Investments 143,000 114,000 Equipment 270,000 242,500 Accumulated depreciation-equipment (50,000) (52,000) Total $682,500 $514,750 Liabilities and Stockholders' Equity Accounts payable Accrued expenses payable Bonds payable Common stock Retained earnings Total $112,000 $67,300 16,500 17,000 110,000 150,000 220,000 175,000 224,000 105,450 $682,500 $514,750 $392,780 Cheng Inc. Income Statement For the Year Ended December 31, 2020 Sales revenue Less: Cost of goods sold $135,460 Operating expenses, excluding depreciation 12,410 Depreciation expense 46,500 Income tax expense 27,280 Interest expense 4,730 Loss on disposal of plant assets 7,500 Net income 233,880 $158,900 Additional information: 1. New equipment costing $85,000 was purchased for cash during the year. 2. Old equipment having an original cost of $57,500 was sold for $1,500 cash. 3. Bonds matured and were paid off at face value for cash. 4. A cash dividend of $40,350 was declared and paid during the year. Further analysis reveals that accounts payable pertain to merchandise creditors. Prepare a statement of cash flows for Cheng Inc. using the direct method. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).) Cheng Inc. Statement of Cash Flows cash paymentsStep by Step Solution
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