Question
Question 21 Use the following financial statements and additional information to prepare a statement of cash flows for the year ended December 31, 2020 using
Question 21
Use the following financial statements and additional information to prepare a statement of cash flows for the year ended December 31, 2020 using the indirect method.
Kris Kringle, Inc. Balance Sheets At December 31 | ||
| 2020 | 2019 |
Assets: |
|
|
Cash | $174,525 | $65,200 |
Accounts receivable, net | 52,850 | 56,750 |
Merchandise inventory | 167,750 | 144,850 |
Prepaid expenses | 16,080 | 12,680 |
Equipment | 290,600 | 245,600 |
Accumulated depreciation-Equipment | (80,600) | (97,600) |
Total assets | $621,205 | $427,480 |
Liabilities: |
|
|
Accounts payable | $55,270 | $45,450 |
Income taxes payable | 10,320 | 12,240 |
Notes payable (long term) | 59,200 | 79,200 |
Total liabilities | $124,790 | $136,890 |
Equity: |
|
|
Common stock | 200,000 | 150,000 |
Paid-in capital in excess of par | 53,000 | 40,000 |
Retained earnings | 243,415 | 100,590 |
Total equity | $426,415 | $290,590 |
Total liabilities and equity | $621,205 | $427,480 |
Kris Kringle, Inc. Income Statement For Year Ended December 31, 2020 | ||
Sales |
| $488,000 |
Cost of goods sold | $222,540 |
|
Depreciation expense | 25,000 |
|
Other operating expenses | 106,260 |
|
Interest expense | 6,400 | (360,200) |
Other gains (losses): |
|
|
Gain on sale of equipment |
| 2,850 |
Income before taxes |
| 130,650 |
Income taxes expense |
| 30,525 |
Net income |
| $100,125 |
Additional Information a. Cash dividends declared and paid were $55,000. b. New equipment is purchased for $150,000 cash. c. Received $49,550 cash for the sale of equipment.
d. Issued new shares of stock receiving $157,000 cash.
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