METLOCK INC. COMPARATIVE BALANCE SHEET AS OF DECEMBER 31, 2020 AND 2019     12/31/20   12/31/19 Cash   $5,900     $6,900   Accounts receivable   61,400     51,200   Short-term debt investments (available-for-sale)   34,700     18,000   Inventory   40,200     59,700   Prepaid rent   5,000     4,100   Equipment   152,700     130,200   Accumulated depreciation—equipment   (35,400 )   (25,000 ) Copyrights   45,700     49,900   Total assets   $310,200     $295,000                 Accounts payable   $46,300     $40,400   Income taxes payable   3,900     6,000   Salaries and wages payable   8,100     3,900   Short-term loans payable   8,100     10,100   Long-term loans payable   60,200     69,400   Common stock, $10 par   100,000     100,000   Contributed capital, common stock   30,000     30,000   Retained earnings   53,600     35,200   Total liabilities & stockholders’ equity   $310,200     $295,000     METLOCK INC. INCOME STATEMENT FOR THE YEAR ENDING DECEMBER 31, 2020 Sales revenue       $335,075 Cost of goods sold       175,200 Gross profit       159,875 Operating expenses       120,100 Operating income       39,775 Interest expense   $11,400     Gain on sale of equipment   2,000   9,400 Income before tax       30,375 Income tax expense       6,075 Net income       $24,300 Additional information: 1.   Dividends in the amount of $5,900 were declared and paid during 2020. 2.   Depreciation expense and amortization expense are included in operating expenses. 3.   No unrealized gains or losses have occurred on the investments during the year. 4.   Equipment that had a cost of $20,100 and was 70% depreciated was sold during 2020. Prepare a 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).)

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
icon
Related questions
Question

Metlock Inc., a greeting card company, had the following statements prepared as of December 31, 2020.

METLOCK INC.
COMPARATIVE BALANCE SHEET
AS OF DECEMBER 31, 2020 AND 2019
   
12/31/20
 
12/31/19
Cash
 
$5,900
   
$6,900
 
Accounts receivable
 
61,400
   
51,200
 
Short-term debt investments (available-for-sale)
 
34,700
   
18,000
 
Inventory
 
40,200
   
59,700
 
Prepaid rent
 
5,000
   
4,100
 
Equipment
 
152,700
   
130,200
 
Accumulated depreciation—equipment
 
(35,400
)
 
(25,000
)
Copyrights
 
45,700
   
49,900
 
Total assets
 
$310,200
   
$295,000
 
             
Accounts payable
 
$46,300
   
$40,400
 
Income taxes payable
 
3,900
   
6,000
 
Salaries and wages payable
 
8,100
   
3,900
 
Short-term loans payable
 
8,100
   
10,100
 
Long-term loans payable
 
60,200
   
69,400
 
Common stock, $10 par
 
100,000
   
100,000
 
Contributed capital, common stock
 
30,000
   
30,000
 
Retained earnings
 
53,600
   
35,200
 
Total liabilities & stockholders’ equity
 
$310,200
   
$295,000
 

 

METLOCK INC.
INCOME STATEMENT
FOR THE YEAR ENDING DECEMBER 31, 2020
Sales revenue
     
$335,075
Cost of goods sold
     
175,200
Gross profit
     
159,875
Operating expenses
     
120,100
Operating income
     
39,775
Interest expense
 
$11,400
   
Gain on sale of equipment
 
2,000
 
9,400
Income before tax
     
30,375
Income tax expense
     
6,075
Net income
     
$24,300


Additional information:

1.   Dividends in the amount of $5,900 were declared and paid during 2020.
2.   Depreciation expense and amortization expense are included in operating expenses.
3.   No unrealized gains or losses have occurred on the investments during the year.
4.   Equipment that had a cost of $20,100 and was 70% depreciated was sold during 2020.


Prepare a 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).)

METLOCK INC.
Statement of Cash Flows
choose the accounting period                                                           
select an opening name for section one                                                           
   
select an item                                                           
 
$enter a dollar amount 
Adjustments to reconcile net income to
   
select a subsection name                                                           
   
select an item                                                           
$enter a dollar amount 
 
select an item                                                           
enter a dollar amount
 
select an item                                                           
enter a dollar amount
 
select an item                                                           
enter a dollar amount
 
select an item                                                           
enter a dollar amount
 
select an item                                                           
enter a dollar amount
 
select an item                                                           
enter a dollar amount
 
select an item                                                           
enter a dollar amount
 
select an item                                                           
enter a dollar amount
 
   
enter a subtotal of the adjustments
select a closing name for section one                                                           
 
enter a total amount for section one
     
select an opening name for section two                                                           
   
select an item                                                           
enter a dollar amount
 
select an item                                                           
enter a dollar amount
 
select an item                                                           
enter a dollar amount
 
select a closing name for section two                                                           
 
enter a total amount for section two
     
select an opening name for section three                                                           
   
select an item                                                           
enter a dollar amount
 
select an item                                                           
enter a dollar amount
 
select an item                                                           
enter a dollar amount
 
select a closing name for section three                                                           
 
enter a total amount for section three
     
select an item                                                           
 
enter a total amount for three sections
select an item                                                           
 
enter a dollar amount
select a closing name for this statement                                                           
 
$enter a total of the two previous amounts 
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 2 steps

Blurred answer
Knowledge Booster
Ratio Analysis
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education