The Alfio Company's income statement for the year ending December 31, 2019, and comparative balance sheets as of December 31 of 2019 and 2018 are shown below: Alfio Company Income Statement For the Year Ended December 31, 2019 Sales revenue $645,000 Cost of goods sold (430,000) Gross margin $215,000 Operating expenses Wages $91,000 Insurance 12,000 Depreciation 13,000 (116,000) Operating income $ 99,000 Interest expense (15,000) Income before income taxes $ 84,000 Provision for income taxes (29,000 Net income $ 55,000 Alfio Company Balance Sheets As of December 31, 2019 2018 2019 2018 Cash $ 31,000 $8,000 Accounts payable $ 7,000 $10,000 Accounts receivable $ 41,000 32,000 Wages payable 10,000 6,000 Inventory 90,000 65,000 Dividends payable 11,000 7,000 Prepaid insurance. 5,000 7,000 Income taxes payable 6,000 7,000 Current assets $167,000 $112,000 Current liabilities $ 34,000 $ 30,000 Bonds payable 120,000 80,000 Plant assets 219,000 202,000 Common stock 90,000 90,000 Accumulated depreciation (68,000) (55,000) Retained earnings $ 74,000 $ 59,000 Total assets $318.000 $259.000 Liab. and equity $318,000 $259.000 Alfio Company declared dividends in 2019, issued bonds for cash and purchased plant assets for cash. Bond interest was paid on June 30th and December 31. Accounts payable relate to merchandise purchases. Required: a. Prepare a complete Statement of Cash Flows T-account (CFO, CFI, CFF) using the Direct Method to determine Cash Provided by (or Used in) Operating Activities (CFO). b. Then prepare a schedule to reconcile net income to CFO. The Alfio Company's income statement for the year ending December 31, 2019, and comparative balance sheets as of December 31 of 2019 and 2018 are shown below: Alfio Company Income Statement For the Year Ended December 31, 2019 Sales revenue $645,000 Cost of goods sold (430,000) Gross margin $215,000 Operating expenses Wages $91,000 Insurance 12,000 Depreciation 13,000 (116,000) Operating income $ 99,000 Interest expense (15,000) Income before income taxes $ 84,000 Provision for income taxes (29,000 Net income $ 55,000 Alfio Company Balance Sheets As of December 31, 2019 2018 2019 2018 Cash $ 31,000 $8,000 Accounts payable $ 7,000 $10,000 Accounts receivable $ 41,000 32,000 Wages payable 10,000 6,000 Inventory 90,000 65,000 Dividends payable 11,000 7,000 Prepaid insurance. 5,000 7,000 Income taxes payable 6,000 7,000 Current assets $167,000 $112,000 Current liabilities $ 34,000 $ 30,000 Bonds payable 120,000 80,000 Plant assets 219,000 202,000 Common stock 90,000 90,000 Accumulated depreciation (68,000) (55,000) Retained earnings $ 74,000 $ 59,000 Total assets $318.000 $259.000 Liab. and equity $318,000 $259.000 Alfio Company declared dividends in 2019, issued bonds for cash and purchased plant assets for cash. Bond interest was paid on June 30th and December 31. Accounts payable relate to merchandise purchases. Required: a. Prepare a complete Statement of Cash Flows T-account (CFO, CFI, CFF) using the Direct Method to determine Cash Provided by (or Used in) Operating Activities (CFO). b. Then prepare a schedule to reconcile net income to CFO
