The Dadson Company MixMax Company MixMax Company Comparative Balance Sheets Statement of Cash Flows Income Statement January 1 March 31 For the three months ended March 31 For the three months ended March 31 2001 2001 Change 2001 2001 Assets Cash from Operations $12,407 Revenues Cash $8,400 $18,400 $10,000 Sales Revenue $118,000 Accounts Receivable 1,600 24,000 $22,400 Cash from Investing Events Cost of Goods Sold ($56,000) Inventory 7,000 5,000 ($2,000) Gross Profit $62,000 Prepaid Rent 3,000 1,500 ($1,500) Property, Plant & Equipment 45,000 $45,000 Operating Expenses Accumulated Depreciation 0 (2,025) (2,025) Total Investing Cash Flows Operating Expenses 23,641 Depreciation Expense 2,025 Total Assets 520.000 $91.875 $71,875 Cash from Financing Events Rent Expense 1,500 Interest Expense 1,334 Total (28,500) Liabilities & Shareowners' Equity Total Financing Cash Flows Income before Income Taxes $33,500 Advances from Customers 1,400 0 (1,400) Tax Expense (13,400) Accounts Payable Merchandise 3,600 9,000 5,400 Change in Cash $10,000 Net Income $20,100 Accounts Payable Services 200 4,943 4,743 Cash, as of January 1 8,400 Interest Payable 439 139 Cash, as of March 31 $18,400 Current Portion - Long-term Debt 5.266 5,266 Long-term Debt 38,627 38,627 Common Stock 13,000 13,000 Required: Retained Earnings 1,800 20,600 18,800 a Prepare journal entries for all of the events that occurred during the first quarter of 2001, based ONLY on the information in these financial statements. Be prepared to defend on assumptions or deductions that you may make Total Liabilities & Shareowners' Equity 520.000 $91 875 $71,875 to complete the problem. b From the accompanying balance sheet and income statements, prepare the statement of cash flows for the So SO So first quarter of 2001. In answering this question, consider your answers to the Thought Questions provided. Thought Questions 1 Can you determine the original amount of borrowing solely from these financial statements? 2 Could events impacting the comparative balance sheets have warranted a different presentation of the statement of cash Flows? 3 What events require the preparation of the schedule of significant non-cash financing and investing events?Advances IS Accounts Receivable Common Stock Inventory AP - M A/P-5 Acc Dep Interest Payable CP-LTD Changein Cash Tax Payable LTD D