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The statement of income and unclassified statement of financial position for Sunland, Inc. follow: SUNLAND, INC. Statement of Financial Position December 31 Assets 2021 2020
The statement of income and unclassified statement of financial position for Sunland, Inc. follow:
SUNLAND, INC. Statement of Financial Position December 31 | |||||||
---|---|---|---|---|---|---|---|
Assets | 2021 | 2020 | |||||
Cash | $98,400 | $47,600 | |||||
Trading investments | 130,000 | 116,000 | |||||
Accounts receivable | 71,000 | 41,400 | |||||
Inventory | 121,300 | 91,950 | |||||
Estimated inventory returns | 2,300 | 1,700 | |||||
Prepaid expenses | 18,000 | 28,600 | |||||
Equipment | 309,000 | 282,000 | |||||
Accumulated depreciation | (45,500 | ) | (53,300 | ) | |||
Total assets | $704,500 | $555,950 | |||||
Liabilities and Shareholders Equity | |||||||
Accounts payable | $96,000 | $77,500 | |||||
Property tax payable | 9,700 | 7,100 | |||||
Refund liability | 1,100 | 700 | |||||
Bank loan payablecurrent portion | 90,000 | 107,450 | |||||
Bank loan payablenoncurrent portion | 63,700 | 63,700 | |||||
Common shares | 200,000 | 180,000 | |||||
Retained earnings | 244,000 | 119,500 | |||||
Total liabilities and shareholders equity | $704,500 | $555,950 |
SUNLAND, INC. Statement of Income Year Ended December 31, 2021 | ||||||
Sales | $536,550 | |||||
Cost of goods sold | 188,850 | |||||
Gross profit | 347,700 | |||||
Operating expenses | 116,440 | |||||
Income from operations | 231,260 | |||||
Other income and expenses | ||||||
Unrealized gain on trading investments | $14,000 | |||||
Interest expense | (4,770 | ) | 9,230 | |||
Income before income tax | 240,490 | |||||
Income tax expense | 44,000 | |||||
Net income | $196,490 |
Additional information regarding 2021:
1. | Prepaid expenses and property tax payable relate to operating expenses. | |
2. | New equipment costing $86,000 was purchased for $20,200 cash and a $65,800 long-term bank loan payable. | |
3. | Old equipment having an original cost of $59,000 was sold for $1,000. | |
4. | Accounts payable relate to inventory suppliers. | |
5. | Some of the bank loan was repaid during the year. | |
6. | A dividend was paid during the year. | |
7. | Operating expenses include $47,000 of depreciation expense and a $3,200 loss on disposal of equipment. | |
8. | Common shares were issued for $42,000 cash during the year and some common shares were bought back and retired at the cost they were originally issued at. |
(a) Prepare the statement of cash flows, using the indirect method. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)
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