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Preparation of Cash flows statement operational section - indirect method

Preparation of Cash flow statement operational section - indirect method

Actives 5 Cash and cash equivalents 6 Accounts receivable 7 Provision for bad debts 8 Inventory 9 Other current assets 10 Total Current Assets B C D E LAST, INC. Comparative Statements of Financial Position At 31 of December 2019 2018 Change $ 41,600 $ 30,000 11600 INCREASE 84,500 92,000 -7500 DECREASE (2,500) (2.000) 500 INCREASE 103,000 75,000 28000 INCREASE 54,000 22,000 32000 INCREASE $ 280,600 $ 217,000 $ 17,000 $ 16,900 33,900 20,000 18,000 30,000 521,000 310,000 (82,000) (55,000) $788,500 $538,900 100 INCREASE 13900 INCREASE -12000 DECREASE 211000 INCREASE 27000 INCREASE 17 12 Net investment in bonds - AFS 13 Investment shares economic method 14 Patent 15 Property, plant and Equipment 16 Accumulated depreciation Total Assets 18 DEBTS AND EQUITY 20 Account payable 21 Salary payable 22 Tax payable 23 Interes payable 24 Other current Liabilities Total Current Liabilities $ 87,000 12,000 3,000 2,000 500 104,500 $ 61,000 15,000 0 500 700 77,200 26000 INCREASE -3000 DECREASE 3000 INCREASE 1500 INCREASE -200 DECREASE 120,000 9,000 233,500 115,000 5,000 197,200 5000 INCREASE 4000 INCREASE 27 Bonds payable 28 Plus: Bonus payable premium Total Liabilities 30 31 Common Shares ($ 10 par value) 32 Capital Contributed in excess - Common 33 Capital Contributed in excess-Treasury Shares 34 Options-Capital (new employee options plan) 35 Retained earnings 36 Treasury Shares 37 Other Comprehensive Income Accum (Unrealized Gain from AFS) Total Liabilities and Equity 29,500 182,400 2,000 26,700 317,900 (5,000) 1,500 $ 788,500 15,000 85,000 0 0 250,700 (10,000) 1,000 $538,900 14500 INCREASE 97400 INCREASE 2000 INCREASE 26700 INCREASE 67200 INCREASE -5000 DECREASE 500 INCREASE LAST, INC. Statement of Income and Expenses For the year ending December 31, 2019 Sales........................................................ $ 650,000 Cost of goods sold.................. (325.000) Operational expenses.......... (179.000) Interest Income.. ............... 700 Interest Expense... (6.900) Investment income (economic method).. 15,000 Gain on sale of AFS investments ............... 200 Loss on sale of equipment....................... (2.000) Income before Contributions......... Contribution expenses. Net income........................ . $ 153,000 (65.000) $ 88,000 Aditional information 1. During the year, the company did not eliminate account receivable. There was also no impairment of assets or debts. 2. Operating expenses include: depreciation expense, bad debt expense, patent amortization expense (The company only owns one patent and was acquired two years ago), and compensation expense for employee option plans. This is the first year of service under the plan. Neither option has been exercised. 3. The company purchased bonds from ABC and classified them as available-for-sale securities (AFS). In addition, the company sold an investment in AFS at a cost of 1,000. All the company's investments in debt securities (bonds) were purchased at a premium and classified as AFS. 300 premiums were amortized. 4. The company purchased new equipment in exchange for cash. In addition, it sold a used asset with an original cost of $10,000 and a book value of $ 8,000. 5. Bonds with a par value of $ 100,000 to 110 were issued. In addition, bonds with a principal of $ 95,000 and a book value of $ 97,000 were exchanged by bondholders for 1,000 common shares. 6. A 10% share dividend was declared. As a result, 250 common shares were distributed to shareholders. The fair value of the shares at the reporting date was $ 40. No common shares were withdrawn during the year. However, 200 shares were sold for $ 2,900 above their par value. 7. At the end of last year, the company acquired 30% of the voting shares of XYZ in exchange for $ 20,000. This year XYZ declared a net income of $ 50,000 and paid $ 1,100 of dividends to LAST INC 8. Half of the treasury shares were sold above their cost. Transactions of equity shares did not affect the retained earnings account. 9. LAST INC declared and paid a cash dividend. In addition to the stock dividend this was the only transaction that reduced the retained earnings account