Question
The following is the comparative balance sheet as of December 31, 2019 and 2018 and the income statement for the year ended December 31, 2019
The following is the comparative balance sheet as of December 31, 2019 and 2018 and the income statement for the year ended December 31, 2019 for Lynbrook Inc.:
Lynbrook Inc. | |||||||
Comparative Balance Sheet | |||||||
December 31, 2019 and 2018 | |||||||
Assets: | 2019 | 2018 | |||||
Cash | $ 39 | $ 81 | |||||
Accounts receivable | 640 | 588 | |||||
Inventory | 650 | 610 | |||||
Total current assets | 1,329 | 1,279 | |||||
Property, Plant & Equipment | 1,505 | 1484 | |||||
Less: Accumulated depreciation | (770) | (651) | |||||
Net Property, Plant & Equipment | 735 | 833 | |||||
Total Assets | $ 2,064 | $ 2,112 | |||||
Liabilities and Stockholders' | |||||||
Equity | |||||||
Current liabilities | |||||||
Accounts payable | $ 260 | $ 160 | |||||
Accrued liabilities | 180 | 170 | |||||
Income tax payable | 77 | 72 | |||||
Total current liabilities | 517 | 402 | |||||
Bonds payable | 415 | 600 | |||||
Total liabilities | 932 | 1,002 | |||||
Shareholders' Equity: | |||||||
Common stock | 145 | 145 | |||||
Retained earnings | 987 | 965 | |||||
Total stockholders' equity | 1,132 | 1,110 | |||||
Total Liabilities and Stockholder's | |||||||
Equity | $ 2,064 | $ 2,112 | |||||
Lynbrook Inc. | |||||||
Income Statement | |||||||
For the year ended December 31, 2019 | |||||||
Sales | $ 3,700 | ||||||
Cost of goods sold | 2,540 | ||||||
Gross Margin | 1,160 | ||||||
Selling and administrative expenses | 880 | ||||||
Net operating income | 280 | ||||||
Other income and expenses | |||||||
Gain on sale of equipment | 2 | ||||||
Income before taxes | 282 | ||||||
Income tax expense | 112 | ||||||
Net Income | $ 170 |
The accounting department at Lynbrook provided the additional information for you on the next page.
-
The company sold equipment that had an original cost of $12 million and accumulated depreciation of $7 million. The cash proceeds from the sale were $7 million. The gain on the sale was $2 million.
-
The company purchased equipment for cash during the year.
-
The company did not issue any new bonds during the year.
-
The company paid a cash dividend during the year.
-
The company did not issue or repurchase any shares of common stock during the year.
Required:
Prepare a complete statement of cash flows for the year (operating, investing, and financing). Use the indirect method to prepare the operating activities section of the statement.
Reminder: Continue using the excel HW policies for preparing your solutions to the above questions, including the standard four line heading.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started