Problem 4: Statement of Cash flows
Jackson Ski Haus had the following statements prepared as of December 31, 2012:
JACKSON SKI HAUS
COMPARATIVE BALANCE SHEET
AS OF DECEMBER 31	2020		2019
Cash	$ 2,500		$ 4,000
Accounts receivable	103,000		97,000
Short-term investments (Available-for-sale)	96,000		121,000
Inventories	91,000		54,000
Prepaid insurance	4,000		6,000
Ski equipment	89,000		43,000
Accumulated depr.equipment	$ (23,500)		(18,000)
Trademarks	79,000		83,000
Total assets	$ 441,000		$ 390,000
Accounts payable	$ 92,200		$ 75,000
Income taxes payable	21,800		15,700
Wages payable	4,000		9,000
Short-term loans payable to bank	23,500		-
Long-term loans payable	75,000		125,000
Common stock, $1 par	100,000		100,000
Additional paid-in capital	20,000		20,000
Retained earnings	104,500		45,300
Total liabilities & equity	$ 937,500		$ 390,000
JACKSON SKI HAUS INCOME STATEMENT FOR THE YEAR ENDING DECEMBER 31, 2020
Sales	$540,200
Cost of goods sold	302,000
Gross margin	238,200
Operating expenses	94,000
Operating income	144,200
Interest expense	$20,500
Loss on sale of equipment 4,000	24,500
Income before income tax	119,700
Income tax expense	40,500
Net income	$79,200
Additional information:
1. Dividends in the amount of $20,000 were declared and paid during 2020.
2. Depreciation expense and amortization expense are included in operating expenses.
3. Equipment that had a cost of $25,000 and was 20% depreciated was sold during 2020. Instructions Prepare a statement of cash flows using the direct method. (Do not prepare a reconciliation schedule.)
Instructions
Create statement of cash flows using the direct method. Remember all supplementary schedules. A worksheet is available for your use. (hint The Company bought equipment).