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Homework answers / question archive / Pretty Corp had the following financial data related to the years ended December 31: Cash Accounts receivable Merchandise inventory Equipment Accumulated depreciation, equipment December 31 2020 2019 $22,000 $42,000 90,000 73,000 143,000 145,000 507
Pretty Corp had the following financial data related to the years ended December 31: Cash Accounts receivable Merchandise inventory Equipment Accumulated depreciation, equipment December 31 2020 2019 $22,000 $42,000 90,000 73,000 143,000 145,000 507.000 252,000 47.000 42.000 $715.000 $470.000 Accounts payable Income taxes payable Notes payable Common shares Retained earnings $90,000 5,000 160,000 370,000 90.000 $715.000 $50,000 10,000 80,000 250,000 80.000 $470.000 $286,000 $156,000 20,000 72.000 248.000 $38,000 Sales (all on credit) Cost of goods sold Depreciation expense Other operating expenses Operating income Other revenue (expenses) Interest revenue Interest expense Gain on disposal of equipment Income before income taxes Income tax expense Net income $21,000 (15,000) 10.000 16.000 $54,000 14,000 $40.000 Additional information: 1) Purchased $310,000 in equipment by paying cash. 2) Sold equipment with a cost of $55,000 and accumulated depreciation of $15,000, yielding a gain of $10,000. 3) Received $90,000 cash from issuance of notes payable. 4) Paid $10,000 cash to retire note notes payable. 5) Received $120,000 cash from issuing common shares. 6) Paid ? in dividends for the year. REQUIRED: Prepare a statement of cash flows for the year ended December 31, 2020 using the indirect method.
| Cash Flow from Operating Activities: | ||
| Net Income | $ 40,000 | |
| Adjustment to reconcile Net Income to cash provided by operating activities | ||
| Depreciation expense | $ 20,000 | |
| Gain on disposal of equipment | $ -10,000 | |
| Increase Accounts receivable | $ -17,000 | |
| Decrease Merchandise inventory | $ 2,000 | |
| Increase Accounts payable | $ 40,000 | |
| Decrease Income tax payable | $ -5,000 | |
| $ 30,000 | ||
| Cash provided by operating activities | $ 70,000 | |
| Cash Flow from Investing Activities: | ||
| Purchase equipment | $ -3,10,000 | |
| Sold equipment ($55000 - $15000 + $10000) | $ 50,000 | |
| Cash used by Investing Activities | $ -2,60,000 | |
| Cash Flow from Financing Activities: | ||
| Issue common shares | $ 1,20,000 | |
| Retire notes payable | $ -10,000 | |
| Issue notes payable | $ 90,000 | |
| Paid Dividend ($80000 + $40000 - $90000) | $ -30,000 | |
| Cash provided by Financing Activities | $ 1,70,000 | |
| Net cash provided (used) by all activities | $ -20,000 | |
| Add: Beginning Cash Balance | $ 42,000 | |
| Ending cash Balance | $ 22,000 |
