The comparative balance sheets for 2021 and 2020 and the statement of income for 2021 are given below for McDoodies Company Additional information from McDoodles accounting records is provided also MCDOODLE COMPANY Comparative Balance Sheets December 31, 2021 and 2020 is in ons 2021 Assets Cash 5 130 1110 Accounts receivable 320 320 Less: Allowance for uncollectible accounts (11) Prepaid insurance 4 Inventory 300 300 Long-term investment Sg Land 210 Buildings and equipment 330 310 Less: Accumulated depreciation (110) 100 Trademark 28 51.275 51271 Liabilities Accounts payable 5 41 $ 80 Salaries payable Deferred tax ability 20 Lease ability o Bonds payable 140 300 Less Discount on bonds (271 21) Shareholders' Equity Common stock 330 310 Pald-in capital-excess of par 105 Preferred stock 0 Retained earnings 499 51.275 51.275 6988998 210 8888 8888 $ 450 7 5 473 200 MCDOODLE COMPANY Income Statement For Year Ended December 31, 2021 (5.in millions) Revenues Sales revenue Investment revenue Gain on sale of investments Expenses Cost of goods sold Salaries expense Depreciation expense Amortization expense Bad debt expense Insurance expense Interest expense Loss on sale of building Income before tax Income tax expense Net income (468 468 416 57 $ 26 Additional information from the accounting records a Investment revenue includes McDoodie Company's $9 million share of the net income of Dust Pallet Corporation, an equity method investee b. A long-term investment in bonds, originally purchased for $40 milion, was sold for 547 milion c. Pretax accounting income exceeded taxable income, causing the deferred income tax liability to increase by $6 million d. A building that originally cost $60 million, and which was one fourth deprecated, was destroyed by fire Some undamaged sections were sold for $4 million The right to use a building was acquired with a seven-year lease agreement present value of lease payments, 580 million Annual lease payments of 514 million are paid at Jan. 1 of each year starting in 2021 $160 million of bonds were retired at maturity $20 million par value of common stock was sold for $50 milion, and 560 milion of preferred stock was sold at par h Shareholders were paid cash dividends of $26 million MCDOODLE COMPANY Statement of Cash Flows For the year ended December 31, 2021 Cash flows from operating activities Cantinflow: 1 Cash outflows Net cash flows from operating activities cash flows from investing activities Cash flows from financing activities: Net cash flows from financing activities Net increase (decrease) In cash Cash balance, January 1 Cash balance, December 31