Question
The comparative balance sheet of Livers Inc. for December 31, 20Y3 and 20Y2, is as follows: The income statement for the year ended December 31,
The comparative balance sheet of Livers Inc. for December 31, 20Y3 and 20Y2, is as follows:
The income statement for the year ended December 31, 20Y3, is as follows:
Additional data obtained from an examination of the accounts in the ledger for 20Y3 are as follows:
a. The investments were sold for $175,000 cash. | |
b. Equipment and land were acquired for cash. | |
c. There were no disposals of equipment during the year. | |
d. The common stock was issued for cash. | |
e. There was a $90,000 debit to Retained Earnings for cash dividends declared. |
Prepare a statement of cash flows, using the direct method of presenting cash flows from operating activities. Be sure to complete the heading of the statement. Refer to the Labels and Amount Descriptions list provided for the exact wording of the answer choices for text entries. Enter amounts that represent cash outflows as negative numbers using a minus sign.
1 Dec. 31, 20Y3 Dec. 31,2092 2 Assets 3 Cash $155,000.00 $150,000.00 450,000.00 400,000.00 4 Accounts receivable (net) 5 Inventories 6 Investments 770,000.00 750,000.00 0.00 100,000.00 7 Land 500,000.00 0.00 8 Equipment 1,400,000.00 1,200,000.00 9 Accumulated depreciation-equipment (600,000.00) (500,000.00) 10 Total assets $2,675,000.00 $2,100,000.00 $340,000.00 $300,000.00 45,000.00 50,000.00 11 Liabilities and Stockholders' Equity 12 Accounts payable (merchandise creditors) 13 Accrued expenses payable (operating expenses) 14 Dividends payable 15 Common stock, $4 par 16 Paid-in capital in excess of par-common stock 17 Retained earnings 30,000.00 25,000.00 700,000.00 600,000.00 200,000.00 175,000.00 1,360,000.00 950,000.00 18 Total liabilities and stockholders' equity $2,675,000.00 $2,100,000.00 1 Sales $3,000,000.00 2 Cost of goods sold (1,400,000.00) 3 Gross profit $1,600,000.00 4 Operating expenses: 5 Depreciation expense $100,000.00 6 Other operating expenses 950,000.00 7 Total operating expenses (1,050,000.00) $550,000.00 8 Operating income 9 Other income: 75,000.00 10 Gain on sale of investments 11 Income before income tax $625,000.00 12 Income tax expense (125,000.00) 13 Net income $500,000.00Step by Step Solution
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