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The December 31, 2019 comparative balance sheet of Kawacatoose Inc. carried the following information: ASSETS Cash Accounts receivable Merchandise inventory Plant and equipment Accumulated depreciation
The December 31, 2019 comparative balance sheet of Kawacatoose Inc. carried the following information: ASSETS Cash Accounts receivable Merchandise inventory Plant and equipment Accumulated depreciation 2019 $202,000 311,200 468,000 1,440,000 (328,000) $2,093,200 2018 $60,000 160,000 406,000 1,400,000 (300,000) $1,726,000 LIABILITIES AND SHAREHOLDERS' EQUITY Accounts payable Salaries payable Long-term notes payable Common shares Retained earnings $160,000 110,000 660,000 460,000 703,200 $2,093,200 $186,800 100,000 540,000 440,000 459,200 $1,726,000 $3,000,000 The 2019 Income Statement was as follows: Sales Expenses: Cost of goods sold Wages expense Rent expense Supplies expense Depreciation expense Total expenses Operating profit Loss on sale of plant asset Profit $1,460,000 500,000 320,000 108,000 40,000 2,428,000 $572,000 28,000 $544,000 Continued on next page.... ADDITIONAL INFORMATION: 1. The following transaction was recorded when plant assets were sold Accumulated Depreciation, Plant Assets 12,000 Cash 160,000 Loss on sale of plant assets 28,000 Plant Assets 200,000 2. The following transaction was recorded when plant assets were purchased Plant Assets 240,000 Cash 120,000 Notes payable 120,000 3. Issued 2,000 common shares in 2019 for 20,000 4. Paid total cash dividends during 2019 of 300,000 UIRED: 1. Prepare a Cash Flow Statement for Kawacatoose Inc. for December 31, 2019 using proper format. (19 marks) 2. Cash increased from 2018 to 2019. Using the information from the statement of cash flows you prepare, briefly explain what caused this change. (1 mark)
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