Question
Tamarisk Inc., a greeting card company, had the following statements prepared as of December 31, 2020. TAMARISK INC. COMPARATIVE BALANCE SHEET AS OF DECEMBER 31,
Tamarisk Inc., a greeting card company, had the following statements prepared as of December 31, 2020.
TAMARISK INC. COMPARATIVE BALANCE SHEET AS OF DECEMBER 31, 2020 AND 2019 | ||||||
---|---|---|---|---|---|---|
12/31/20 | 12/31/19 | |||||
Cash | $6,000 | $6,900 | ||||
Accounts receivable | 62,400 | 50,800 | ||||
Short-term debt investments (available-for-sale) | 35,100 | 18,100 | ||||
Inventory | 40,100 | 60,400 | ||||
Prepaid rent | 5,100 | 4,000 | ||||
Equipment | 152,400 | 131,000 | ||||
Accumulated depreciationequipment | (34,700 | ) | (24,800 | ) | ||
Copyrights | 45,500 | 49,900 | ||||
Total assets | $311,900 | $296,300 | ||||
Accounts payable | $45,900 | $39,900 | ||||
Income taxes payable | 4,000 | 6,000 | ||||
Salaries and wages payable | 8,100 | 4,000 | ||||
Short-term loans payable | 8,100 | 10,000 | ||||
Long-term loans payable | 59,500 | 68,700 | ||||
Common stock, $10 par | 100,000 | 100,000 | ||||
Contributed capital, common stock | 30,000 | 30,000 | ||||
Retained earnings | 56,300 | 37,700 | ||||
Total liabilities & stockholders equity | $311,900 | $296,300 |
TAMARISK INC. INCOME STATEMENT FOR THE YEAR ENDING DECEMBER 31, 2020 | ||||
---|---|---|---|---|
Sales revenue | $337,125 | |||
Cost of goods sold | 176,500 | |||
Gross profit | 160,625 | |||
Operating expenses | 120,600 | |||
Operating income | 40,025 | |||
Interest expense | $11,400 | |||
Gain on sale of equipment | 2,000 | 9,400 | ||
Income before tax | 30,625 | |||
Income tax expense | 6,125 | |||
Net income | $24,500 |
Additional information:
1. | Dividends in the amount of $5,900 were declared and paid during 2020. | |
2. | Depreciation expense and amortization expense are included in operating expenses. | |
3. | No unrealized gains or losses have occurred on the investments during the year. | |
4. | Equipment that had a cost of $20,000 and was 70% depreciated was sold during 2020. |
Prepare a statement of cash flows using the direct method. (Show amounts in the investing and financing sections that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)
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