Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Statement of Cash Flows (Direct Method) North Companys income statement and comparative balance sheets as of December 31 of 2019 and 2018 follow: NORTH COMPANY
Statement of Cash Flows (Direct Method)
North Companys income statement and comparative balance sheets as of December 31 of 2019 and 2018 follow:
NORTH COMPANY Income Statement For the Year Ended December 31, 2019 | ||
---|---|---|
Sales Revenue | $770,000 | |
Cost of Goods Sold | $550,000 | |
Wages Expense | 195,000 | |
Advertising Expense | 31,000 | |
Depreciation Expense | 24,000 | |
Interest Expense | 20,000 | |
Gain on Sale of Land | (25,000) | 795,000 |
Net Loss | $(25,000) |
NORTH COMPANY Balance Sheets | ||
---|---|---|
Dec. 31, 2019 | Dec. 31, 2018 | |
Assets | ||
Cash | $80,000 | $32,000 |
Accounts Receivable | 42,000 | 49,000 |
Inventory | 107,000 | 115,000 |
Prepaid Advertising | 10,000 | 14,000 |
Plant Assets | 360,000 | 210,000 |
Accumulated Depreciation | (80,000) | (56,000) |
Total Assets | $519,000 | $364,000 |
Liabilities and Stockholders Equity | ||
Accounts Payable | $19,000 | $25,000 |
Interest Payable | 6,000 | - |
Bonds Payable | 210,000 | - |
Common Stock | 245,000 | 245,000 |
Retained Earnings | 69,000 | 94,000 |
Treasury Stock | (30,000) | - |
Total Liabilities and Stockholders Equity | $519,000 | $364,000 |
During 2019, North sold land for $70,000 cash that had originally cost $45,000. North also purchased equipment for cash, acquired treasury stock for cash, and issued bonds payable for cash. Accounts payable relate to merchandise purchases.
Required a. Calculate the change in cash that occurred during 2019. b. Prepare a statement of cash flows using the direct method.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started