Comparative balance sheet accounts of Kingbird Inc. are presented below. KINGBIRD INC. COMPARATIVE BALANCE SHEET ACCOUNTS...

Comparative balance sheet accounts of Kingbird Inc. are presented below.

KINGBIRD INC. COMPARATIVE BALANCE SHEET ACCOUNTS AS OF DECEMBER 31, 2020 AND 2019
	December 31
Debit Accounts	2020	2019
Cash	$42,200	$33,900
Accounts Receivable	71,100	59,600
Inventory	30,000	23,800
Equity investments	22,400	38,400
Machinery	30,200	18,600
Buildings	67,000	56,000
Land	7,500	7,500
	$270,400	$237,800

Credit Accounts
Allowance for Doubtful Accounts	$2,300	$1,600
Accumulated Depreciation—Machinery	5,600	2,200
Accumulated Depreciation—Buildings	13,400	9,100
Accounts Payable	34,800	24,600
Accrued Payables	3,400	2,600
Long-Term Notes Payable	20,900	31,200
Common Stock, no-par	150,000	125,000
Retained Earnings	40,000	41,500
	$270,400	$237,800

Additional data (ignoring taxes):

1.		Net income for the year was $44,400.
2.		Cash dividends declared and paid during the year were $20,900.
3.		A 20% stock dividend was declared during the year. $25,000 of retained earnings was capitalized.
4.		Equity investments (level of ownership is less than 20%) that cost $25,100 were sold during the year for $28,100. No unrealized gains and losses were recorded on these investments in 2020.
5.		Machinery that cost $3,800, on which $750 of depreciation had accumulated, was sold for $2,250.

Kingbird’s 2020 income statement follows (ignoring taxes).

Sales revenue			$544,300
Less: Cost of goods sold			381,900
Gross margin			162,400
Less: Operating expenses (includes $8,450 depreciation and $5,327 bad debts)			120,200
Income from operations			42,200
Other: Gain on sale of investments	$3,000
Loss on sale of machinery	(800	)	2,200
Net income			$44,400

(a) Compute net cash flow from operating activities using the direct method. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)

Net cash flow from operating activities

$

(b) 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).)\

PLEASE SHOW WORK.

Expert Solution

ekkarill92 answered 3 years ago

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