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Sandhill Ltd., a private company reporting under ASPE, reported the following for the years ended May 31, 2021, and 2020. SANDHILL LTD. Balance Sheet May
Sandhill Ltd., a private company reporting under ASPE, reported the following for the years ended May 31, 2021, and 2020.
SANDHILL LTD. Balance Sheet May 31 | ||||||
Assets | 2021 | 2020 | ||||
Cash | $25,400 | $47,000 | ||||
Accounts receivable | 89,000 | 79,000 | ||||
Inventory | 185,000 | 160,000 | ||||
Prepaid expenses | 6,000 | 7,500 | ||||
Land | 137,000 | 80,000 | ||||
Equipment | 320,000 | 200,000 | ||||
Accumulated depreciation | (78,200 | ) | (40,000 | ) | ||
Total assets | $684,200 | $533,500 | ||||
Liabilities and Shareholders Equity | ||||||
Accounts payable | $43,000 | $40,000 | ||||
Dividends payable | 7,500 | 6,000 | ||||
Income taxes payable | 3,200 | 7,000 | ||||
Mortgage payable | 132,000 | 80,000 | ||||
Common shares | 219,000 | 166,000 | ||||
Retained earnings | 279,500 | 234,500 | ||||
Total liabilities and shareholders equity | $684,200 | $533,500 |
Additional Information: | ||
1. | Profit for 2021 was $108,000. | |
2. | Common shares were issued for $53,000. | |
3. | Land with a cost of $53,000 was sold at a loss of $20,000. | |
4. | Purchased land with a cost of $110,000 with a $58,000 down payment and financed the remainder with a mortgage note payable. | |
5. | No equipment was sold during 2021. |
Prepare a cash flow statement for the year using the indirect method. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)
SANDHILL LTD. Cash Flow Statement - Indirect Method | ||
$ | ||
Adjustments to reconcile profit to | ||
$ | ||
$ | ||
$ | ||
$ |
Note X: Land with as cost of $ _ was purchased by paying $ _ cash and issuing a mortgage note payable for $ _
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