The Sunshine Cash Cow Co

Balance Sheet as of December 31

	2019	2020
Assets
Cash	$ 1900	$ 3644
Accounts receivable (net)	3400	3240
Marketable securities (at cost)	2300	4400
Allowance for change in value of marketable securities	900	1230
Inventory	8800	9160
Prepaid items	1600	1430
Investments (long term)	7600	5900
Land	15500	15500
Buildings and equipment	33000	46800
Less: Accumulated depreciation	(20000)	(21300)
Total Assets	$ 55000	$ 70004
Liabilities & SH Equity
Accounts payable	$ 4200	$ 3600
Income taxes payable	2400	2364
Deferred taxes payable	1200	1602
Wages payable	1800	2850
Interest payable	0	480
Note payable (long term)	4620	0
12% Bonds payable	0	12000
Discount on bonds payable	(0 )	(348)
Preferred stock, $100 par	9800	9800
Common stock, $10 par	14700	18000
Additional—paid-in capital	9100	10420
Unrealized increase in value of marketable securities	900	1230
Retained earnings	6280	8006
Total Liab. and SH Equity	$ 55000	$ 70004

The Sunshine Cash Cow Company Income Statement

For the Year Ended December 31, 2020

Sales		$ 40530
Cost of goods sold		(20090)
Depreciation expense		(2500)
Wages expense		(12600)
Other operating expenses		(1600)
Bond interest expense		(492)
Dividend revenue		880
Gain on sale of investments		770
Loss on sale of equipment		(276)
Income tax expense		(2050)
Discontinued operations loss:	(210)
Net of reduction of income tax liability	84	(126)
Net Income		$ 2446

Other information related to the Company:

1. The firm declared and paid dividends of $720 during the year.
2. Long-term non-marketable investments that cost $1700 were sold, resulting in a $770 gain.
3. The long-term note payable was paid by issuing 330 shares of common stock at the beginning of the year.
4. On January 10, the company discontinued an operating unit comprised of equipment with an original cost of $700 and a book value of $420. Sale of the equipment yielded a before-tax loss from discontinued operations of $210.
5. The firm sold equipment with an original cost of $2300 and a book value of $1380, resulting in a $276 loss.
6. The firm purchased new equipment for $16800.
7. 12% bonds payable were issued on September 1, 2020 at 97% of face value. They mature on September 1, 2030. The company uses the straight-line method to amortize the discount.
8. Taxable income was less than pretax accounting income, resulting in a $402 increase in deferred taxes payable.
9. Short-term marketable securities were purchased at a cost of $2100. The portfolio was increased by $330 to a $5630 fair value at year-end by adjusting the related allowance account.

REQUIRED: Using this information, prepare (1) the firm’s Statement of Cash Flows (all three sections) for 2020 using the direct method for the operating activities section, including a schedule of any non-cash investing and financing activities at the bottom of this statement, and (2) a separate schedule of the operating activities section (only) using the indirect method.

Also the first sheet turned in should be a cover sheet which includes your name, etc. Only turn in required items (exclude these instructions and paper on which you worked out the solution). The statement should be properly prepared (organized, labeled, type-written, etc.) to resemble a Statement of Cash Flow for Sunshine’s annual report.