Condensed financial data of Cheng Inc. follow. Cheng Inc. Comparative Balance Sheets December 31 Assets 2020 2019 Cash $ 80,800 $ 48,400 Accounts receivable 92,800 33,000 Inventory 117,500 102,850 Prepaid expenses 28,400 26,000 Investments 143,000 114,000 Equipment 270,000 242,500 Accumulated depreciation--- (50,000) (52,000) equipment Total $ 682,500 $ 514,750 Liabilities and Stockholders’ Equity Accounts payable $ 112,000 $ 67,300 Accrued expenses payable 16,500 17,000 Bonds payable 110,000 150,000 Common stock 220,000 175,000 Retained earnings 224,000 105,450 Total $ 682,500 $ 514,750 Cheng Inc. Income Statement For the Year Ended December 31, 2020 Sales revenue $392,780 Less: Cost of goods sold $135,460 Operating expenses, 12,410 excluding depreciation Depreciation expense 46,500 Income tax expense 27,280 Interest expense 4,730 Loss on disposal of plant assets 7,500 233,880 Net income $158,900 Additional information: New equipment costing $85,000 was purchased for cash during the year. Old equipment having an original cost of $57,500 was sold for $1,500 cash. Bonds matured and were paid off at face value for cash. A cash dividend of $40,350 was declared and paid during the year. Instructions Prepare a statement of cash flows using the indirect method.
Condensed financial data of Cheng Inc. follow.
Cheng Inc.
Comparative
December 31
Assets 2020 2019
Cash $ 80,800 $ 48,400
Inventory 117,500 102,850
Prepaid expenses 28,400 26,000
Investments 143,000 114,000
Equipment 270,000 242,500
equipment
Total $ 682,500 $ 514,750
Liabilities and
Accounts payable $ 112,000 $ 67,300
Accrued expenses payable 16,500 17,000
Bonds payable 110,000 150,000
Common stock 220,000 175,000
Total $ 682,500 $ 514,750
Cheng Inc.
Income Statement
For the Year Ended December 31, 2020
Sales revenue $392,780
Less:
Cost of goods sold $135,460
Operating expenses, 12,410
excluding depreciation
Depreciation expense 46,500
Income tax expense 27,280
Interest expense 4,730
Loss on disposal of plant assets 7,500 233,880
Net income $158,900
Additional information:
- New equipment costing $85,000 was purchased for cash during the year.
- Old equipment having an original cost of $57,500 was sold for $1,500 cash.
- Bonds matured and were paid off at face value for cash.
- A cash dividend of $40,350 was declared and paid during the year.
Instructions
Prepare a statement of
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
