Sales revenue Interest revenue 18,500 350 COGS 9,850 Interest expense 360 R&D 200 Loss on sale of equipment 170 Gain on sale of land Dividend revenue 20 200 Lehigh Jeans Comparative Balance Sheets As of Dec 31, ($ in thousands) 2023 2024 2023 2024 Current assets: Liabilities Cash 6,885 9,006 Accounts payable (inventory) 1,225 Accounts receivable (A/R) 2,550 4,500 Unearned revenue 3,500 3,300 Inventory 3,500 3,150 Wages payable 2,500 3,100 Prepaid insurance 600 800 Notes payable 3,450 Interest receivable 200 315 Loan payable 3,500 Dividend receivable 0 50 Dividends payable 0 Total current assets 13,735 17,821 Total liabilities 14,175 15,575 Non-current assets: Stockholders' equity PPE: CS 2,000 Equipment 12,600 APIC 4,960 less A/D Equipment 4,200 6,520 RE 5,500 Land 4,500 Total assets 26,635 29,771 Total liabilities and SE Direct method Cash flow statement (IFRS) For the Year ended Dec 31, 2024 Net cash flows from operating activities Net cash flows from investing activities Net cash flows from financing activities Net change in cash Cash, Jan 1, 2023 Cash, Dec 31, 2024 Note Indirect method (operating section (IFRS) Net cash from operating activities The following events/transactions occurred during 2024: 1. Jan 1 - purchased equipment in exchange for a $2,500 note payable. 2. Jan 17 - Firm sold equipment which cost $900 (the only PPE sold). Cash sale 3. Jan 30 - prepaid $480 for insurance for the next 12 months. 4. Feb 1 - purchased an equipment for $250 cash. 5. Feb 24 acquired land in exchange for 2,000 loan payable. 6. Mar 15 - sold land for $2,500 cash (not the same land as in (5) above). 7. Apr 30 - Firm declared dividends of $3,000. 8. May 31 - Issued 1,000 shares and received $2,000. The par value of the shares is $1 each. 9. Sept 6 - Lehigh paid $2,500 dividends to shareholders. 10. Nov 1 - received $235 cash for interest earned. 11. Nov 5 - Cash dividend of $150 was received. 12. Cash wages paid during the year were $900. 13. There were no payables related to R&D, interest, and tax expenses. 14. Of the sales revenue, the firm made one cash sale of $6,000 (January 3) and $3,500 of unearned revenue was earned on July 31. 15. Of the inventory purchases, $1,000 were cash purchases. 16. $9,500 cash paid for inventory credit purchases. 17. $3,000 of the Notes payable were paid on July 24. 18. Depreciation expense is $2,500. 19. The firm uses reversing entries for prepaid insurance, unearned revenue, and wages payable. Fill in T-accounts for prepaid insurance, unearned revenue, and wages payable as if reversing entries are not used. However, prepare journal entries as if reversing entries are used. ADDITIONAL INFORMATION: 1. Assume all transactions are on credit (payables and receivables), unless stated otherwise. This does not apply to prepayments or any other payments where it specifically says cash was paid or received. 2. Lehigh Jeans uses IFRS to prepares its financial statements. 3. Tax rate is 35% (round tax expense to nearest dollar). REQUIRED: 1. Complete the T-accounts below (not all accounts are listed). Start by adding all information from the balance sheet and income statement in the T-accounts. Then post the changes in the accounts during the period using the list of transactions above. 2. Prepare journal entries for all events/transactions 1 through 11 above (All journal entries should have a date and caption. For example: "Jan 15 To record cash sale of inventory"). 3. Prepare all entries for the year needed for unearned revenue, prepaid insurance, and wages payable, including beginning of period reversing entries on Jan 1, 2024 and Jan 1, 2025, prepayments, adjusting entries at the end of the period, clearly labeling them. 4. Fill in the missing amounts in the Balance Sheet. 5. Prepare a statement of cash flows using the direct method. Prepare the operating section of the statement of cash flows using the indirect method. 6. Prepare a statement of cash flows (direct method and operating section for indirect) assuming Lehigh uses the most common practice under IFRS. 7. Prepare a multi-step comprehensive income statement. Check: A=L+SE; Net cash flows from operating activities are the same using the direct and indirect method, Change in cash calculated in the B/S and Statement of cash flows is the same Accounts receivable Unearned revenue Inventory Accounts payable Prepaid insurance Interest receivable Notes payable Wages payable Retained earnings Land Equipment Accumulated depreciation - Equipment Dividends payable Cash Dividend receivable