Use the Income Statement and Comparative Balance Sheet Provided and the following additional information to prepare the Statement of Cash Flows (Indirect Method) for the month of January 2020 (see page 581 for an example). Check figure: net cash provided by operating activities $55,050. Issued 10,000 new shares of common stock in exchange for a piece of land. The stock was selling on the market at an average price of $10 per share on the date of sale and the par value of the stock was 50 cents. Purchased land with a cost $250,000. A down payment was made in the amount of $50,000 cash and a 10% 5-year note payable was signed for the difference. Purchased additional store equipment for $50,000 paying cash. The $10,000 notes receivable was related to the sale of merchandise inventory to a credit customer this period. Hint: The increase in notes receivable should be reported as an addition to the operating activities section of the statement of cash flows. Issued bonds with a face amount of $800,000 at 97. Hint: The amortization of the bond discount in the amount of $100 should be reported as an addition to the operating activities section. Used the cash proceeds from the bond issue to pay off the mortgage payable of $200,000 The company repurchased 20,000 shares of its common stock on the open market for $9 per share. The company reissued 9,125 of the treasury shares at a price of $20 per share. Issued 1,500 shares of preferred stock at $105 per share. Paid cash dividends of $31,060 to preferred and common stockholders. $ 139,000 3,800 135,200 60 84,560 50,700 Be Prepared Income Statement January 31, 2020 Sales Sales Revenue Less: Sales discounts $ 800 Sales returns and allowances 3,000 Net Sales Interest Revenue Cost of goods sold Gross Profit Expenses Insurance Expense-General 200.00 Repairs Expense: Office 3,000.00 Depreciation Expense: Building - General 750.00 Depreciation Expense: Office Equipment 3,000.00 Supplies Expense - Selling 1,200.00 Utilities Expense: Office 1,500.00 Office Salaries Expense 16,000.00 Office Payroll Tax Expense 1,200.00 Depreciation Expense: Store Equipment 800.00 Amortization Expense: Patents - General 700.00 Sales Salaries Expense 10,000.00 Sales Payroll Tax Expense 800.00 Utilities Expense: Store 1,100.00 Delivery Expense - General 2,000.00 Repairs Expense: Store 800.00 Bad Debts Expense - Selling 460.00 Interest Expense 5,878.00 Total Expenses Net Income 49,388.00 1,312.00 Compative Balance Sheet 2020 2019 Difference % Change Assets 96% -77% Current Assets Cash Accounts Receivable, Net ($23000 - 5450) Merchandise inventory Store supplies Office supplies Prepaid Insurance Interest Receivable Notes Receivable Total Current Assets 687,490 22.540 5,190 10 000 300 2,800 60 10,000 738,380 27,500 40,000 50,000 0 1,500 3,000 0 0 122.000 659,990 (17,460) (44,810) 10,000 (1,200) (200) 60 10,000 616.380 -863% 100% 400% -7% 100% 100% 83% Non-Current Assets Land Building, Net (5400000 - 545750) Office Equipment, Ner (590000-$17500) Store Equipment, Net ($125000-515800) Total Non-Current Assets Intangible Assets Patents 414,25000 354250 72500 109200 950,200 64,250 355000 75,000 60000 554,250 350,000 (750) (2,500) 49,200 395,950 84% 0% -3% 45% 42% 69 300 70,000 (700) -1% 1.757.880 746.250 1,011.630 58% Total Assets Liabilities and Shareholders Equity 25,000 7,500 25,000 7,500 4,778 37278 0 0 4,778 4778 0% 0% 100% 13% 32500 Liabilities Current Liabilities Accounts Payable Income Tax Payable Interest Payable Total Current Liabilities Non-Current Liabilities Mortgage Payable Notes Payable Longterm Bonds Payable Less: Discount on Bonds Payable Total Non-Current Liabilities Total Liabilities 200,000 800,000 23 900 976,100 1013378 200,000 0 0 0 200000 232500 (200,000) 200,000 800,000 23,900 776100 780878 100% 100% 100% 80% 77% Shareholders Equity Preferred Stock Common Stock Paid in Capital in Excess of Par - Preferred Paid in Capital in Excess of Par-Common Paid in Capital-Treasury Stock Retained Earnings Less: Treasury Stock Total Shareholders Equity Total Liabilities and Shareholders Equity 400,000 105,000 20 000 165,250 72 000 53 940 250,000 100,000 7,500 71,250 0 85,000 150,000 5,000 12,500 95,000 72,000 (31,060) 38% 5% 63% 57% 100% 58% 74 000 743190 1756568 0 513750 746250 74,000 100% 229440 0.30872321 1010318 0.57516589 Use the Income Statement and Comparative Balance Sheet Provided and the following additional information to prepare the Statement of Cash Flows (Indirect Method) for the month of January 2020 (see page 581 for an example). Check figure: net cash provided by operating activities $55,050. Issued 10,000 new shares of common stock in exchange for a piece of land. The stock was selling on the market at an average price of $10 per share on the date of sale and the par value of the stock was 50 cents. Purchased land with a cost $250,000. A down payment was made in the amount of $50,000 cash and a 10% 5-year note payable was signed for the difference. Purchased additional store equipment for $50,000 paying cash. The $10,000 notes receivable was related to the sale of merchandise inventory to a credit customer this period. Hint: The increase in notes receivable should be reported as an addition to the operating activities section of the statement of cash flows. Issued bonds with a face amount of $800,000 at 97. Hint: The amortization of the bond discount in the amount of $100 should be reported as an addition to the operating activities section. Used the cash proceeds from the bond issue to pay off the mortgage payable of $200,000 The company repurchased 20,000 shares of its common stock on the open market for $9 per share. The company reissued 9,125 of the treasury shares at a price of $20 per share. Issued 1,500 shares of preferred stock at $105 per share. Paid cash dividends of $31,060 to preferred and common stockholders. $ 139,000 3,800 135,200 60 84,560 50,700 Be Prepared Income Statement January 31, 2020 Sales Sales Revenue Less: Sales discounts $ 800 Sales returns and allowances 3,000 Net Sales Interest Revenue Cost of goods sold Gross Profit Expenses Insurance Expense-General 200.00 Repairs Expense: Office 3,000.00 Depreciation Expense: Building - General 750.00 Depreciation Expense: Office Equipment 3,000.00 Supplies Expense - Selling 1,200.00 Utilities Expense: Office 1,500.00 Office Salaries Expense 16,000.00 Office Payroll Tax Expense 1,200.00 Depreciation Expense: Store Equipment 800.00 Amortization Expense: Patents - General 700.00 Sales Salaries Expense 10,000.00 Sales Payroll Tax Expense 800.00 Utilities Expense: Store 1,100.00 Delivery Expense - General 2,000.00 Repairs Expense: Store 800.00 Bad Debts Expense - Selling 460.00 Interest Expense 5,878.00 Total Expenses Net Income 49,388.00 1,312.00 Compative Balance Sheet 2020 2019 Difference % Change Assets 96% -77% Current Assets Cash Accounts Receivable, Net ($23000 - 5450) Merchandise inventory Store supplies Office supplies Prepaid Insurance Interest Receivable Notes Receivable Total Current Assets 687,490 22.540 5,190 10 000 300 2,800 60 10,000 738,380 27,500 40,000 50,000 0 1,500 3,000 0 0 122.000 659,990 (17,460) (44,810) 10,000 (1,200) (200) 60 10,000 616.380 -863% 100% 400% -7% 100% 100% 83% Non-Current Assets Land Building, Net (5400000 - 545750) Office Equipment, Ner (590000-$17500) Store Equipment, Net ($125000-515800) Total Non-Current Assets Intangible Assets Patents 414,25000 354250 72500 109200 950,200 64,250 355000 75,000 60000 554,250 350,000 (750) (2,500) 49,200 395,950 84% 0% -3% 45% 42% 69 300 70,000 (700) -1% 1.757.880 746.250 1,011.630 58% Total Assets Liabilities and Shareholders Equity 25,000 7,500 25,000 7,500 4,778 37278 0 0 4,778 4778 0% 0% 100% 13% 32500 Liabilities Current Liabilities Accounts Payable Income Tax Payable Interest Payable Total Current Liabilities Non-Current Liabilities Mortgage Payable Notes Payable Longterm Bonds Payable Less: Discount on Bonds Payable Total Non-Current Liabilities Total Liabilities 200,000 800,000 23 900 976,100 1013378 200,000 0 0 0 200000 232500 (200,000) 200,000 800,000 23,900 776100 780878 100% 100% 100% 80% 77% Shareholders Equity Preferred Stock Common Stock Paid in Capital in Excess of Par - Preferred Paid in Capital in Excess of Par-Common Paid in Capital-Treasury Stock Retained Earnings Less: Treasury Stock Total Shareholders Equity Total Liabilities and Shareholders Equity 400,000 105,000 20 000 165,250 72 000 53 940 250,000 100,000 7,500 71,250 0 85,000 150,000 5,000 12,500 95,000 72,000 (31,060) 38% 5% 63% 57% 100% 58% 74 000 743190 1756568 0 513750 746250 74,000 100% 229440 0.30872321 1010318 0.57516589