Sunland Inc., a greeting card company, had the following statements prepared as of December 31, 2025. Sunland Inc. Comparative Balance Sheet As of December 31, 2025 and 2024 SUNLAND INC. STATEMENT OF CASH FLOWS 12/31/25 12/31/24 Cash $5,900 $7,000 Accounts receivable 61,500 51,400 Short-term debt investments (available-for-sale) 35,400 17,800 Adjustments to reconcile net income to Inventory 39,900 60,400 Prepaid rent 4,900 3,900 Equipment 155,300 131,000 Accumulated depreciation-equipment (34,700) (25,200) Copyrights 45,900 49,900 Total assets $314,100 $296,200 Accounts payable $46,500 $39,600 Income taxes payable 4,100 5,900 Salaries and wages payable 8,100 4,100 Short-term loans payable 8,000 9,900 Long-term loans payable 60,600 68,600 Common stock, $10 par 100,000 100,000 Paid-in capital, common stock 30,000 30,000 Retained earnings 56,800 38,100 Total liabilities and stockholders' equity $314,100 $296,200 Sunland Inc. Income Statement For the Year Ending December 31, 2025 Sales revenue $335,275 Cost of goods sold 173,900 Gross profit 161,375 Operating expenses 121,000 Operating income 40,375 Interest expense $11,500 Gain on sale of equipment 2,000 9,500 Income before tax 30,875 Income tax expense 6,175 Net income $24,700 Additional information: 1. Dividends in the amount of $6,000 were declared and paid during 2025. 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 $19,900 and was 70% depreciated was sold during 2025. 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).)
Sunland Inc., a greeting card company, had the following statements prepared as of December 31, 2025. Sunland Inc. Comparative Balance Sheet As of December 31, 2025 and 2024 SUNLAND INC. STATEMENT OF CASH FLOWS 12/31/25 12/31/24 Cash $5,900 $7,000 Accounts receivable 61,500 51,400 Short-term debt investments (available-for-sale) 35,400 17,800 Adjustments to reconcile net income to Inventory 39,900 60,400 Prepaid rent 4,900 3,900 Equipment 155,300 131,000 Accumulated depreciation-equipment (34,700) (25,200) Copyrights 45,900 49,900 Total assets $314,100 $296,200 Accounts payable $46,500 $39,600 Income taxes payable 4,100 5,900 Salaries and wages payable 8,100 4,100 Short-term loans payable 8,000 9,900 Long-term loans payable 60,600 68,600 Common stock, $10 par 100,000 100,000 Paid-in capital, common stock 30,000 30,000 Retained earnings 56,800 38,100 Total liabilities and stockholders' equity $314,100 $296,200 Sunland Inc. Income Statement For the Year Ending December 31, 2025 Sales revenue $335,275 Cost of goods sold 173,900 Gross profit 161,375 Operating expenses 121,000 Operating income 40,375 Interest expense $11,500 Gain on sale of equipment 2,000 9,500 Income before tax 30,875 Income tax expense 6,175 Net income $24,700 Additional information: 1. Dividends in the amount of $6,000 were declared and paid during 2025. 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 $19,900 and was 70% depreciated was sold during 2025. 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).)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Sunland Inc., a greeting card company, had the following statements prepared as of December 31, 2025.
Sunland Inc.
Comparative Balance Sheet
As of December 31, 2025 and 2024
SUNLAND INC.
STATEMENT OF CASH FLOWS
12/31/25
12/31/24
Cash
$5,900
$7,000
Accounts receivable
61,500
51,400
Short-term debt investments (available-for-sale)
35,400
17,800
Adjustments to reconcile net income to
Inventory
39,900
60,400
Prepaid rent
4,900
3,900
Equipment
155,300 131,000
Accumulated depreciation-equipment
(34,700) (25,200)
Copyrights
45,900
49,900
Total assets
$314,100 $296,200
Accounts payable
$46,500 $39,600
Income taxes payable
4,100
5,900
Salaries and wages payable
8,100
4,100
Short-term loans payable
8,000
9,900
Long-term loans payable
60,600
68,600
Common stock, $10 par
100,000
100,000
Paid-in capital, common stock
30,000
30,000
Retained earnings
56,800
38,100
Total liabilities and stockholders' equity
$314,100 $296,200
Sunland Inc.
Income Statement
For the Year Ending December 31, 2025
Sales revenue
$335,275
Cost of goods sold
173,900
Gross profit
161,375
Operating expenses
121,000
Operating income
40,375
Interest expense
$11,500
Gain on sale of equipment
2,000
9,500
Income before tax
30,875
Income tax expense
6,175
Net income
$24,700
Additional information:
1. Dividends in the amount of $6,000 were declared and paid during 2025.
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 $19,900 and was 70% depreciated was sold during 2025.
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).)
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