Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

The income statement, balance sheets, and additional information for Great Adventures, Inc., are provided below. GREAT ADVENTURES, INC. Income Statement For the Year Ended December

image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
The income statement, balance sheets, and additional information for Great Adventures, Inc., are provided below. GREAT ADVENTURES, INC. Income Statement For the Year Ended December 31, 2020 Revenues: Service revenue (clinic, racing, TEAM) Sales revenue (Mu watches) $553,000 128,000 Total revenues Expenses: Cost of goods sold (watches) Operating expenses Depreciation expense Interest expense Income tax expense $681,000 75,000 304,776 55,000 30,224 60,000 Total expenses 525,000 Net income $ 156,000 GREAT ADVENTURES, INC. Balance Sheets December 31, 2020 and 2019 Increase (I) or 2020 2019 Decrease (D) Assets Current assets: Cash Accounts receivable Inventory Other current assets Long-term assets: Land Buildings Equipment Accumulated depreciation $ 286,046 52,500 17,750 13,750 $143,000 40,000 14,500 11,500 143,046 () 12,500 (I) 3,250 () 2,250 (I) 400,000 1,200,000 70,000 (81,500) 0 400,000 () 1,200,000 () 0 70,000 (26,500) 55,000 () Total assets $1,958,546 $252,500 Liabilities and Stockholders' Equity Current liabilities: Accounts payable $ 12,750 9,500 3,250 () GREAT ADVENTURES, INC Balance Sheets December 31, 2020 and 2019 Increase (I) or 2020 2019 Decrease (D) Assets Current assets: Cash $ 286,046 52,500 17,750 13,750 $143,000 40,000 14,500 11,500 143,046 () 12,500 () 3,250 (I) 2,250 () Accounts receivable Inventory Other current assets Long-term assets: Land Buildings Equipment Accumulated depreciation 400,000 1,200,000 70,000 (81,500) 0 400,000 () 1,200,000 () 0 70,000 (26,500) 55,000 () Total assets $1,958,546 $252,500 Liabilities and Stockholders' Equity Current liabilities: Accounts payable Interest payable Income tax payable Long-term liabilities: Notes payable Stockholders' Equity: Common stock Paid-in capital Retained earnings Treasury stock $ 9,500 800 40,500 12,750 800 60,000 3,250 () 19,500 () 544,796 32,500 512.296 (I) 130,000 1,105,000 170,200 (65,000) 30,000 100,000 () 1,105,000 () 31,000 () (65,000) () 139,200 Total liabilities and stockholders' equity $1,958,546 $252,500 Additional Information for 2020: 1. Borrowed $550,000 in January 2020. Made 12 monthly payments during the year, reducing the balance of the loan by $37.704 2. Issued common stock for $1,200,000. Additional Information for 2020: 1. Borrowed $550,000 in January 2020. Made 12 monthly payments during the year, reducing the balance of the loan by $37,704. 2. Issued common stock for $1,200,000. 3. Purchased 10,000 shares of treasury stock for $13 per share. 4. Reissued 5,000 shares of treasury stock at $14 per share. 5. Declared and paid a cash dividend of $125,000 Required: Prepare the statement of cash flows for the year ended December 31, 2020, using the indirect method. (List cash outflows as negati Answer is not complete. GREAT ADVENTURES, INC. Statement of Cash Flows For the Year Ended December 31, 2020 Cash Flows from Operating Activities Net income Adjustments to reconcile net income to net cash flows from operating activities: Increase in accounts receivable 156,000 (12,500) Increase in inventory (3,250) Increase in other current assets (2,250) 3,250 Increase in accounts payable Increase in income tax payable 19,500 Net cash flow from operating activities 160,750 Cash Flows from Investing Activities Purchase of land (400,000) Purchase of buildings (1,200,000) flows from operating activities: Increase in accounts receivable (12,500) Increase in inventory (3,250) Increase in other current assets (2,250) Increase in accounts payable 3,250 Increase in income tax payable 19,500 Net cash flow from operating activities $ 160,750 Cash Flows from Investing Activities Purchase of land (400,000) Purchase of buildings (1,200,000) Net cash flow from investing activities (1,600,000) Cash Flows from Financing Activities 512,296 Issued notes payable Issued common stock 1,200,000 Payment of dividends (125,000) Purchased treasury stock (130,000) Reissued treasury stock 70,000 Net cash flow from financing activities 1,527,296 Net increase in cash Cash at the beginning of the period 88,046 143,000 231,046 Cash at the end of the period

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

The Fraud Audit Responding To The Risk Of Fraud In Core Business Systems

Authors: Leonard W. Vona

1st Edition

0470647264, 978-0470647264

More Books

Students also viewed these Accounting questions

Question

Who or what is affected by this situation?

Answered: 1 week ago

Question

How important is this situation to the organizations mission?

Answered: 1 week ago