The comparative statements of financial position of Mikos Inc. as at December 31, 2020 and 2021 and its statement of earnings for the year ended December 31, 2021 are presented below:
1. Prepare a statement of cash flows for Mikos Inc. for the year ended December 31, 2021 by using the indirect method. (Negative answers should be indicated by a minus sign.)
The comparative statements of financial position of Mikos Inc. as at December 31, 2020 and 2021 and its statement of earnings for the year ended December 31, 2021 are presented below: MIKOS INC. Comparative Statements of Financial Position December 31 2021 2020 Assets Cash Short-term investments Accounts receivable Inventories, at cost Prepaid expenses Land Property, plant, and equipment, net Intangible assets $ 11,000 $ 19,000 79,000 46,000 78,000 34,000 58,000 42,000 6,000 10,000 53,000 80,000 288,000 189,000 26,000 32,000 $599,000 $452,000 Liabilities and Shareholders' Equity Accounts payable Income tax payable Accrued liabilities Long-term notes payable Contributed capital Retained earnings $ 19,000 $ 44,000 10,000 3,000 12,000 -0- 130,000 190,000 240,000 70,000 188,000 145,000 $599,000 $452,000 $910,000 MIKOS INC. Statement of Earnings For the Year Ended December 31, 2021 Sales Cost of sales Amortization expense-intangible assets Depreciation expense-property, plant, and equipment Operating expenses Interest expense Earnings before income taxes Income tax expense Net earnings $450,000 6,000 35,000 241,000 14,000 746,000 164,000 49,200 $114,800 Additional information is as follows: a. Land was sold for cash at its carrying amount. b. The short-term investments will mature in February 2022. C. Cash dividends were declared and paid in 2021. d. New equipment with a cost of $168,000 was purchased for cash, and old equipment was sold at its carrying amount. e. Long-term notes of $20,000 were paid in cash, and notes of $40,000 were converted to shares. 1. Prepare a statement of cash flows for Mikos Inc. for the year ended December 31, 2021 by using the indirect method. (Negative answers should be indicated by a minus sign.) $ 114,800 Answer is not complete. MIKOS INC. Statement of Cash Flows For the Year Ended December 31, 2021 Cash flows from operating activities: Net earnings Adjustments to reconcile net earnings to net cash provided by operating activities: Depreciation and amortization expense Increase in accounts receivable Increase in inventory Decrease in prepaid expenses Decrease in accounts payable Increase in income tax payable Increase in accrued liabilities 35,000 X $ 149,800 Net cash flow from operating activities Cash flows from investing activities: Purchase of equipment Sale of equipment Sale of land 168,000 X 80,000 248,000 Net cash flow used for investing activities Cash flows from financing activities: Repayment of long-term note Issuance of common shares Payment of cash dividends >> 0 397,800 Net cash flow from financing activities Net increase in cash and short-term investments Cash and short-term investments, beginning of year Cash and short-term investments, end of year $ 397,800
