Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Sunland Company, a major retailer of bicycles and accessories, operates several stores and is a publicly traded company. The comparative balance sheet and income statement
Sunland Company, a major retailer of bicycles and accessories, operates several stores and is a publicly traded company. The comparative balance sheet and income statement for Sunland as of May 31, 2020, are as follows. The company is preparing its statement of cash flows. SUNLAND COMPANY COMPARATIVE BALANCE SHEET AS OF MAY 31 2020 2019 Current assets Cash $28,200 $19,800 Accounts receivable 75,600 58,100 Inventory 219,700 251,200 Prepaid expenses 9,000 6,900 Total current assets 332,500 336,000 Plant assets Plant assets 598,100 505,400 Less: Accumulated depreciation-plant assets 149,300 124,300 Net plant assets 448,800 381,100 Total assets $781,300 $717,100 Current liabilities Accounts payable Salaries and wages payable Interest payable Total current liabilities $123,800 $116,000 46,800 71,800 27,000 25,100 197,600 212,900 Long-term debt Bonds payable Total liabilities 70,000 100,000 267,600 312,900 Stockholders' equity Common stock, $10 par Retained earnings Total stockholders' equity Total liabilities and stockholders' equity 370,000 280,000 143,700 124,200 513,700 404,200 $781,300 $717,100 SUNLAND COMPANY INCOME STATEMENT FOR THE YEAR ENDED MAY 31, 2020 Sales revenue $1,267,000 Cost of goods sold 721,600 Gross profit 545,400 Expenses Salaries and wages expense Interest expense Depreciation expense Other expenses Total expenses Operating income Income tax expense Net income 253,400 75,200 25,000 8,200 361,800 183,600 43,300 $140,300 The following is additional information concerning Sunland's transactions during the year ended May 31, 2020. 1. All sales during the year were made on account 2. All merchandise was purchased on account, comprising the total accounts payable account. 3. Plant assets costing $92,700 were purchased by paying $22,700 in cash and issuing 7,000 shares of stock. 4. The "other expenses" are related to prepaid items. 5. All income taxes incurred during the year were paid during the year. 6. In order to supplement its cash, Sunland issued 2,000 shares of common stock at par value. 7. Cash dividends of $120,800 were declared and paid at the end of the fiscal year. Prepare a statement of cash flows for Sunland Company for the year ended May 31, 2020, using the direct method. (A reconciliation of net income to net cash provided is not required.) (Show amounts in the investing and financing sections that decrease cash flow with either a-sign eg.-15,000 or in parenthesis e.g. (15,000).) SUNLAND COMPANY Statement of Cash Flows (Partial) $ Cash payments:
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