Question
The balance sheet and income statement for Joe's Fish Hut are presented below: Joe's Fish Hut Balance Sheet As at July 31 2020 2019 ASSETS
The balance sheet and income statement for Joe's Fish Hut are presented below:
| Joe's Fish Hut Balance Sheet As at July 31 | ||
| 2020 | 2019 | |
| ASSETS | ||
| Current Assets | ||
| Cash | $129,588 | $51,100 |
| Accounts receivable | $20,900 | $15,600 |
| Merchandise Inventory | $21,000 | $28,500 |
| Total Current Assets | $171,488 | $95,200 |
| Equipment(1) | $146,000 | $189,000 |
| Less: Accumulated depreciation | $-26,700 | $-21,700 |
| TOTAL ASSETS | $290,788 | $262,500 |
| LIABILITIES AND EQUITY | ||
| Liabilities | ||
| Current Liabilities | ||
| Accounts payable | $29,600 | $41,800 |
| Notes payable-current portion | $7,600 | $7,600 |
| Total Current Liabilities | $37,200 | $49,400 |
| Notes payable-long-term portion | $81,000 | $60,000 |
| TOTAL LIABILITIES | $118,200 | $109,400 |
| Shareholders' Equity | ||
| Common shares | $72,000 | $57,900 |
| Retained earnings(2) | $100,588 | $95,200 |
| TOTAL SHAREHOLDERS' EQUITY | $172,588 | $153,100 |
| TOTAL LIABILITIES AND EQUITY | $290,788 | $262,500 |
Additional Information: 1. Equipment During 2020, equipment was sold for a gain of $4,600. The cash proceeds from the sale totaled $47,600. 2. Retained Earnings Joe's Fish Hut declared and paid $6,000 in dividends in 2020.
| Joe's Fish Hut Income Statement For the Year Ended July 31, 2020 | |
| Sales | $128,000 |
| COGS | $83,200 |
| Gross Profit | $44,800 |
| Operating Expenses | |
| Depreciation Expense | $5,000 |
| Other operating expenses | $26,880 |
| Total Operating Expenses | $31,880 |
| Operating Income | $12,920 |
| Other Income | |
| Gain on Sale of Equipment | $4,600 |
| Net Income Before Tax | $17,520 |
| Income Tax | $6,132 |
| Net Income | $11,388 |
Create the cash flow statement using the indirect method.
Do not enter dollar signs or commas in the input boxes. Use the negative sign for a decrease in cash.
| Joe's Fish Hut Cash Flow Statement For the Year Ended July 31, 2020 | ||
| Cash Flow from Operating Activities | ||
| Net Income | Answer | |
| Add: Depreciation | Answer | |
| Less: Gain on sale of equipment | Answer | |
| Change in Operating Assets and Liabilities | ||
| Change in Accounts Receivable | Answer | |
| Change in Merchandise Inventory | Answer | |
| Change in Accounts Payable | Answer | |
| Net Cash Provided (Used) by Operating Activities | Answer | |
| Cash Flow from Investing Activities | ||
| Sale of equipment | Answer | |
| Net Cash Provided (Used) by Investing Activities | Answer | |
| Cash Flow from Financing Activities | ||
| Issue of common shares | Answer | |
| Receipt of notes payable | Answer | |
| Payment of cash dividend | Answer | |
| Net Cash Provided (Used) by Financing Activities | Answer | |
| Net increase (decrease) in cash | Answer | |
| Cash at the beginning of the year | Answer | |
| Cash at the end of the year | Answer | |
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Audit Planning Conduct And Closure Of Issues For Successful Resolution
Authors: Bincy Abraham, Imran Chaki, Naisarg Pujara
1st Edition
6200484961, 978-6200484963
