Question 1 Waterways prepared the balance sheet and income statement for the irrigation installation division for 2020. Now the company also needs to prepare a statement of cash fows for the same division The comparative balance sheets for Waterways Corporation's Irrigation Installation Division for the years 2019 and 2020 and the income statement for the year 2020 are presented below Additional information 1 Waterways sold a company vehicle for $24.300. The vehicle had been used for 10 years. It cost $79,000 when purchased and had a 10-year life and a $6.000 salvage vloe Straight line depreciation was used 2. Waterways purchased with cash new equipment costing $207,100 3. Prepaid expenses increased by $32.900. Al changes in accounts payable relate to inventory purchases WATERWAYS CORPORATION-INSTALLATION DIVISION Balance Sheets December 31 Assets 2020 2019 Current assets Cash $839,600 $742,900 Accounts receivable 675,600 545,200 Work in process 705,300 Inventory 16,900 7.400 Prepaid expenses 75,000 43,000 Total current assets 2,314,100 1.336,500 Property, plant, and equipment Land 302,010 102,000 Buildings 450,000 450,000 Equipment 928.100 800,000 Furnishings 40,000 40,300 Accumulated depreciation (484,300) (485,000) Total property, plant, and equipment 1.236.600 1.100,000 Total assets $3,550,000 52.447.100 Liabilities and Stockholders' Equity Currenties Accounts payable $158.100 5127.500 Income taxes payable 101,100 79,900 Wages payable 1,500 2,000 Interest payable 1,200 $127,500 79,900 2,000 Liabilities and Stockholders' Equity Current liabilities Accounts payable Income taxes payable Wages payable Interest payable Other current liabilities Revolving bank loan payable Total current liabilities Long-term liabilities Note payable Total liabilities Stockholders' equity Common stock Retained earnings Total stockholders' equity Total liabilities and stockholders' equity $158,100 101,100 4,500 1,200 14,400 15,000 294,300 15,200 224,600 137,000 431,300 224,600 1,250,000 1,869,600 3,119,600 $3,550,900 1,250,000 972,500 2,222,500 $2,447,100 WATERWAYS CORPORATION-INSTALLATION DIVISION Income Statement For the Year Ending December 31, 2020 Sales $5,539,071 Less: Cost of goods sold 3,141,800 Gross profit 2,397,271 Operating expenses Advertising $50,000 Insurance 397,300 Salaries and wages 580,400 Depreciation 73,100 Other operating expenses 21,000 Total operating expenses 1,121,800 Income from operations 1,275,471 Other income Gain on sale of equipment 18,300 Other expenses Interest expense (12,200) WATERWAYS CORPORATION-INSTALLATION DIVISION Income Statement For the Year Ending December 31, 2020 Sales $5,539,071 Less: Cost of goods sold 3,141,800 Gross profit 2,397,271 Operating expenses Advertising $50,000 Insurance 397,300 Salaries and wages 580,400 Depreciation 73,100 Other operating expenses 21,000 Total operating expenses 1,121,800 Income from operations 1,275,471 Other income Gain on sale of equipment 18,300 Other expenses Interest expense (12,200) Net other income and expenses 6,100 Income before income tax 1,281,571 Income tax expense 384,471 Net income $897,100 (a) Prepare a statement of cash flows using the indirect method for the year 2020. (S (15,000).) WATERWAYS CORPORATION-Installation Division Statement of Cash Flows-Indirect Method WATERWAYS CORPORATION-Installation Division Statement of Cash Flows-Indirect Method Adjustments to reconcile net income to $ >
