Problem 4 Page 6 Chapter 05 Group work - STU.xlsx Lansbury Inc. had the following balance sheet at December 31, 2019 (end of the prior year). Assets Cash Accounts receivable Investments Plant assets (net) Land $ $ $ $ $ $ Landsbury Inc. Balance Sheet December 31, 2019 Liabilities and Stockholders' Equity 20,000 Accounts payable 21,200 Notes payable (long-term) 32,000 Bonds payable 81,000 Common stock 40,000 Retained earnings 194,200 $ $ $ $ $ $ 30,000 41,000 0 100,000 23,200 194,200 During 2020, the following occurred. 1. Lansbury Inc. sold part of its debt investment portfolio for $15,000. This transaction resulted in a gain of $3,400 for the firm. The company classifies its investments as available-for-sale. 2. A tract of land was purchased for $13,000 cash. 3. Long-term notes payable in the amount of $16,000 were retired before maturity by paying $ 16,000 cash. 4. An additional $20,000 in common stock was issued at par. 5. Dividends of $8,200 were declared and paid to stockholders. 6. Net income for 2020 was $32,000 after allowing for depreciation of $11,000. 7. Land was purchased through the issuance of $35,000 in bonds. 8. At December 31, 2020, Cash was $37,000 and Accounts Receivable was $41,600. Accounts Payable remained at $30,000. Chapter 05 Group work - STU.xlsx Problem 4 Page 7 Prepare a statement of cash flows for 2020 (end of the current year). LANSBURY INC. Statement of Cash Flows For the Year Ended December 31, 2020 Cash flows from operating activities Net income Adjustments to reconcile net income to net cash provided by operating activities: Depreciation expense Loss (gain) on sale of investments Decrease (increase) in accounts receivable Increase (decrease) in accounts payable Net cash provided by operating activities Cash flows from investing activities Sale of investments Purchase of land Net cash used by investing activities Cash flows from financing activities Issuance of common stock Retirement of notes payable Payment of cash dividends Net cash used by financing activities Net increase in cash Cash at beginning of year Cash at end of year Significant noncash investing and financing activities Land purchased through issuance of bonds