Problem 17-10A (a) (indirect method) The financial statements of Sunland Ltd., a private company reporting under ASPE, follow: 2021 57.491 SUNLAND LTD. Balance Sheet December 31 Assets Cash Short-term notes receivable Accounts receivable Inventory Property, plant, and equipment Accumulated depreciation Total assets Llabilities and Shareholders' Equity Accounts payable Income tax payable Notes payable Common shares Retained earnings Total liabilities and shareholders' equity 12,050 27,400 28,900 70,700 (29,400) $117,141 2020 59,900 21,350 13,400 24,400 76,400 (23,900) $121,550 $24,400 2,700 12,500 23,200 54,341 $117.141 $42,200 18,700 9,200 23,200 28,250 $121,550 SUNLAND LTD. Income Statement Year Ended December 31, 2021 Sales $281,400 Cost of goods sold 191,700 Gross profit 89,700 Operating expenses $35,850 Loss on sale of equipment 1,850 37,700 Profit from operations 52,000 Other revenues and expenses Interest revenue S(980) Interest expense 1,850 870 Profit before income tax 51,130 Income tax expense 15,339 Profit $35,791 Additional information: 1. Short-term notes receivable are loans to other companies. During the year, the company collected the outstanding balance at December 31, 2020, and made new loans in the amount of $12,050. 2. Equipment was sold during the year. This equipment cost $14,900 originally and had a carrying amount of $8,050 at the time of sale. 3. Equipment costing $9,200 was purchased in exchange for a 59,200 note payable. 4. Depreciation expense is included in operating expenses. 5. Accounts receivable are from the sale of merchandise on credit. 6. Accounts payable relate to the purchase of merchandise on credit. Prepare a cash flow statement for the year 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).) Prepare a cash flow statement for the year using the indirect method. (Show amounts that decrease cash flow with either a-sign e.g. -15,000 or in parenthesis c.g. (15,000).) SUNLAND LTD. Cash Flow Statement-Indirect Method Year Ended December 31, 2021 v Operating Activities 35,791 Profit Adjustments to reconcile profit to Net Cash Provided by Operating Activities Depreciation Expense 12,350 Loss on Sale of Equipment Decrease in Accounts Payable Decrease in Income Tax Payable Increase in Accounts Receivable Increase in Inventory Net Cash Provided by Operating Activities Investing Activities Sale or Equipment Net Cash Pravided by Investing Activities Financing Activities Issue of Notes Receivable Payment of Cash Dividends Net Cash Pravided by Financing Activities Net Increase in Cash Note: Equipment costing $ was purchased by issuing a nate payable
