Question
The comparative balance sheets for ABC Corporation show the following information. December 31 2020 2019 Cash $33,500 $13,000 Accounts Receivable 12,250 10,000 Inventory 12,000 9,000
- The comparative balance sheets for ABC Corporation show the following information.
December 31
2020 2019
Cash $33,500 $13,000
Accounts Receivable 12,250 10,000
Inventory 12,000 9,000
Available-for-sale debt investments -0- 3,000
Buildings -0- 29,750
Equipment 45,000 20,000
Patents 5,000 6,250
$107,750 $91,000
Allowance for doubtful accounts $3,000 $4,500
Accumulated depreciation-equipment 2,000 4,500
Accumulated depreciation-building -0- 6,000
Accounts payable 5,000 3,000
Dividends payable -0- 5,000
Notes payable, short-term(nontrade) 3,000 4,000
Long-term notes payable 31,000 25,000
Common stock 43,000 33,000
Retained earnings 20,750 6,000
$107,750 $91,000
Additional data related to 2020 are as follows.
- Equipment that had cost $11,000 and was 40% depreciated at time of disposal was sold for $2,500.
- $10,000 of the long-term note payable was paid by issuing common stock.
- Cash dividends paid were $5,000.
- On January 1, 2020, the building was completely destroyed by a flood. Insurance proceeds on the building were $30,000 (net of $2,000 taxes).
- Debt investments (available-for-sale) were sold at $1,700 above their cost. The company has made similar sales and investments in the past.
- Cash was paid for the acquisition of equipment.
- A long-term note for $16,000 was issued for the acquisition of equipment.
- Interest of $2,000 and income taxes of $6,500 were paid in cash.
Requirement:
Prepare a statement of cash flows in good form using the indirect method.
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