Question
The comparative balance sheets for Sarasota Corporation show the following information. December 31 2020 2019 Cash $33,400 $12,900 Accounts receivable 12,300 10,100 Inventory 12,000 9,000
The comparative balance sheets for Sarasota Corporation show the following information.
December 31 | ||||
2020 | 2019 | |||
Cash | $33,400 | $12,900 | ||
Accounts receivable | 12,300 | 10,100 | ||
Inventory | 12,000 | 9,000 | ||
Available-for-sale debt investments | 0 | 3,000 | ||
Buildings | 0 | 29,600 | ||
Equipment | 45,200 | 19,900 | ||
Patents | 4,900 | 6,400 | ||
$107,800 | $90,900 | |||
Allowance for doubtful accounts | $3,000 | $4,600 | ||
Accumulated depreciationequipment | 2,000 | 4,500 | ||
Accumulated depreciationbuilding | 0 | 6,100 | ||
Accounts payable | 4,900 | 3,000 | ||
Dividends payable | 0 | 4,900 | ||
Notes payable, short-term (nontrade) | 2,900 | 4,100 | ||
Long-term notes payable | 31,000 | 25,000 | ||
Common stock | 43,000 | 33,000 | ||
Retained earnings | 21,000 | 5,700 | ||
$107,800 | $90,900 |
Additional data related to 2020 are as follows.
1. | Equipment that had cost $11,000 and was 40% depreciated at time of disposal was sold for $2,500. | |
2. | $10,000 of the long-term note payable was paid by issuing common stock. | |
3. | Cash dividends paid were $4,900. | |
4. | On January 1, 2020, the building was completely destroyed by a flood. Insurance proceeds on the building were $30,100 (net of $1,900 taxes). | |
5. | Debt investments (available-for-sale) were sold at $1,600 above their cost. The company has made similar sales and investments in the past. | |
6. | Cash was paid for the acquisition of equipment. | |
7. | A long-term note for $16,000 was issued for the acquisition of equipment. | |
8. | Interest of $1,900 and income taxes of $6,500 were paid in cash. |
Prepare a statement of cash flows using the indirect method. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)
SARASOTA CORPORATION Statement of Cash Flows |
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