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The financial statements of Trimmer Inc. appear below: TRIMMER INC. Comparative Balance Sheet December 31 2020 2019 Assets Cash 35,000 20,000 Accounts receivable 112,000 103,000
The financial statements of Trimmer Inc. appear below: TRIMMER INC. Comparative Balance Sheet December 31 2020 2019 Assets Cash 35,000 20,000 Accounts receivable 112,000 103,000 Inventory 425,000 460,000 Property, plant and equipment 750,000 800,000 Accumulated depreciation 375,000 330,000 Accumulated depreciation 375,000 330,000 Total assets 947,000 1,053,000 Liabilities & Shareholders' Equity Accounts payable 42,000 68,000 Income taxes payable 18,000 13,000 Bonds payable 825,000 860,000 Common shares, 10,000 shares issued 55,000 42,000 7.000 170,000 Retained earnings Total liabilities and shareholders equity 947000 1,053,000 Total liabilities and shareholders equity 947,000 1,053,000 TRIMMER INC. Income Statement Year Ended December 31, 2020 Sales $932,000 Cost of goods sold 608,000 Gross profit 324,000 Operating expenses 294,000 Profit from operations 30,000 Profit from operations 30,000 Interest expense 12,000 Loss on sale of equipment 15,000 Profit before income taxes 3,000 Income tax expense Net loss 5,000 -$2,000 The following additional data were provided: 1. During the year, equipment was sold. This equipment cost $75,000 originally and had a carrying amount of $32,000 at the time of sale. 2. During the year, replacement equipment was purchased for $25,000 cash. 3. All depreciation expense is in the operating expenses category. All sales and purchases are on account. 5. Accounts payable pertain to merchandise sungliers 4. Net loss $2,000 The following additional data were provided: 1. During the year, equipment was sold. This equipment cost $75,000 originally and had a carrying amount of $32,000 at the time of sale. 2. During the year, replacement equipment was purchased for $25,000 cash, 3. All depreciation expense is in the operating expenses category. All sales and purchases are on account. 5. Accounts payable pertain to merchandise suppliers 6. All operating expenses except for depreciation were paid in cash. 4. Instructions a) Prepare a cash flow statement for TRIMMER Inc., using the direct method or indirect method. ***SHOW YOUR WORK FOR PARTIAL MARKS!!!***
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