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Question #2. (30 marks) Besotted Company's B/S at the end of 2017 included the following items: Current liabilities Bonds payable Common shares Retained earnings $1,020,000
Question #2. (30 marks) Besotted Company's B/S at the end of 2017 included the following items: Current liabilities Bonds payable Common shares Retained earnings $1,020,000 1,100,000 180,000 174,000 le Current assets $1,105,000 Land 30,000 Building 1,120,000 Equipment 320,000 Acc. Depreciation - building (130,000) Acc. Depreciation - equipment (11,000) Intangible assets - patents 40,000 Total $2,474,000 le Total $2,474,000 The following information is available for 2018: NI was $391,000+ Equipment (cost of $20,000 and acc. depreciation of $8,000) was sold for $10,000. Depreciation expense was $4,000 on the building and $9,000 on equipment. Patent amortization expense was $3,000.- Current assets other than cash increased by $229,000. Current liabilities increased by $213,000.- An addition to the building was completed at a cost of $31,000.- A long-term investment in shares was purchased for $20,500 at the end of the year. Bonds payable of $75,000 were issued. Cash dividends of $180,000 were declared and paid." Required: a. Prepare a statement of cash flows for the year ended December 31, 2018. (15 marks) b. Prepare a B/S at December 31, 2018. (Hint: Compute Current assets as a residual, as a plug) (15 marks)
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