Question
In: Accounting
QUESTION 2 Noor Corp.'s statements of financial position at December 31, 2020 and 2019 and information...
QUESTION 2
-
Noor Corp.'s statements of financial position at December 31, 2020 and 2019 and information relating to 2020 activities are presented below:
December 31, ___
2020 2019
Assets
Cash............................................................................................. $ 110,000 $ 50,000
Temporary investments................................................................. 150,000 —
Accounts receivable (net).............................................................. 255,000 255,000
Inventory...................................................................................... 345,000 300,000
Long-term investments.................................................................. 100,000 150,000
Property, plant and equipment...................................................... 850,000 500,000
Accumulated depreciation............................................................ (225,000) (225,000)
Goodwill....................................................................................... 45,000 50,000
Total assets............................................................................ $ 1,630,000 $ 1,080,000
Liabilities and Shareholders' Equity
Accounts payable.......................................................................... $ 415,000 $ 360,000
Long-term note payable................................................................ 145,000 —
Common shares............................................................................ 600,000 475,000
Retained earnings......................................................................... 470,000 245,000
Total liabilities and shareholders' equity................................ $ 1,630,000 $ 1,080,000
Other information relating to 2020 activities:
1. Net income was $ 375,000.
2. Cash dividends of $ 150,000 were declared and paid.
3. Equipment costing $ 250,000, with a book value of $ 80,000, was sold for $ 90,000.
4. A long-term investment was sold for $ 80,000. There were no other transactions affecting long-term investments.
5. 5,000 common shares were issued for $ 25 a share.
6. Temporary investments consist of treasury bills maturing on June 30, 2020
Required
A. Calculate the cash used in investing activities in 2020
B. Calculate the cash provided by financing activities in 2020
Solutions
Expert Solution
A.
| Cash flow from Investing Activities: | ||||
| Purchase of equipment | (600,000.00) | |||
| Sale of equipment | 90,000.00 | |||
| Sale of investment | 80,000.00 | |||
| Purchase of land | - | |||
| Net cash used in Investing Activities | (430,000.00) |
B.
| Cash flow from Finacing Activities: | - | |||
| Proceeds from issuance of share capital | 125,000.00 | |||
| Payment of Dividend | (150,000.00) | |||
| Proceeds from long term note payable | 145,000.00 | |||
| Net cash from Financing Activities | 120,000.00 |
Working note:
| Equipment | |||
| Particulars | Amount | Particulars | Amount |
| To Balance bd | 500,000.00 | By cash sale equpmnt | |
| To Profit on sale | 10,000.00 | By Sales | 90,000.00 |
| Cash (Purchase) | 600,000.00 | Loss on sale | |
| Accumulated depreciation | 170,000.00 | ||
| By Balance cd | 850,000.00 | ||
| 1,110,000.00 | 1,110,000.00 |
| Accumulated depreciation | |||
| Particulars | Amount | Particulars | Amount |
| To Equipment | 170,000.00 | By Balance bd | 225,000.00 |
| By Depreciation | 170,000.00 | ||
| To Balance cd | 225,000.00 | ||
| 395,000.00 | 395,000.00 |
| Retained Earnings | |||
| Particulars | Amount | Particulars | Amount |
| Dividend | 150,000.00 | By Balance bd | 245,000.00 |
| - | Net Income | 375,000.00 | |
| To balance cd | 470,000.00 | ||
| 620,000.00 | 620,000.00 |
| Dividend Payable | |||
| Particulars | Amount | Particulars | Amount |
| To Cash BF | 150,000.00 | By Balance bd | - |
| To balance cd | - | Retained Earnings | 150,000.00 |
| 150,000.00 | 150,000.00 |
| Common Stock | |||
| Particulars | Amount | Particulars | Amount |
| To cash b/f | By Balance bd | 475,000.00 | |
| To balance cd | 600,000.00 | By Cash | 125,000.00 |
| 600,000.00 | 600,000.00 |
| Long term Investment Account | |||
| Particulars | Amount | Particulars | Amount |
| Balance bd | 150,000.00 | By cash | 80,000.00 |
| to profit on sale | 30,000.00 | ||
| By Balance c/d | 100,000.00 | ||
| 180,000.00 | 180,000.00 |
| Cash flow statement of Noor Corp's | ||||
| For Current Years Ended December 31 2020 | ||||
| Particulars | Amount | Amount | ||
| Cash flow from Operating Activities: | ||||
| Net Income | 375,000.00 | |||
| Add: Depreciation | 170,000.00 | |||
| Add: Writing off Goodwill | 5,000.00 | |||
| Less: Pofit on sale of equipment | (10,000.00) | |||
| Less: Profit on sale of investment | (30,000.00) | |||
| Operating profit before working capital changes | 510,000.00 | |||
| Add: increase in Accounts payable | 55,000.00 | |||
| Less: Increase in investment | (150,000.00) | |||
| Less: Increase in inventory | (45,000.00) | |||
| Cash generated from operations before tax and extra ordinary items | 370,000.00 | |||
| Less Income Tax | - | |||
| Net cash from Operating Activities | 370,000.00 | |||
| Cash flow from Investing Activities: | ||||
| Purchase of equipment | (600,000.00) | |||
| Sale of equipment | 90,000.00 | |||
| Sale of investment | 80,000.00 | |||
| Purchase of land | - | |||
 ekkarill92 answered 1 year agoRelated Solutions3020 Corp.'s balance sheet accounts as of December 31, 2020 and 2019 and information relating to...3020 Corp.'s balance sheet accounts as of December 31, 2020 and
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below.
December
31
2020
2019
Assets
Cash
$1,040,000 $ 200,000
Accounts
receivable (net) 1,000,000
1,020,000
Inventory
1,300,000 1,200,000
Long-term
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400,000 600,000
Plant assets
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Accumulated
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Liabilities
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RM'000
Tombak
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Meriam
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Ordinary share capital
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8000
1280
Retained profit
480
576
400
Profit for the year
960
512
1120
Dividend paid
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Loan from tombak
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Overdraft
160
288
Traade payables
560
192
160
16560
9568
3120
Land
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3360
1424
Building
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3200
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Keris Tombak Meriam
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Retained Profit 480 576 400
Profit for the year 960 512 1120
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Loan from Tombak 320
Overdraft 160 288
Trade Payables 560 192 160
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Plant and machinery 3440 1440 512
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Comparative Statements of Financial Position
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Assets
2017
2016
Land
€ 75,000
€100,000
Equipment
250,000
200,000
Accumulated depreciation—equipment
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(42,000)
Inventory
180,000
187,000
Accounts receivable
85,000
76,000...
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2020 2019
Cash
$100,000
$ 27,000
Accounts receivable
95,000
80,000
Allowance for doubtful accounts
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(3,100)
Inventory
145,000
175,000
Prepaid expenses
7,500
6,800
Land
100,000
60,000
Buildings
287,000
244,000
Accumulated depreciation
(35,000)
(13,000)
Patents
20,000
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$715,000
35,000
————————
$611,700
Accounts payable
$ 90,000
$ 84,000
Accrued liabilities
54,000
63,000
Bonds payable
135,000
60,000
Common stock
100,000
100,000
Retained earnings——appropriated
80,000
10,000
Retained earnings——unappropriated
271,000
302,700...
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Property, plant and equipment
720
60
75
Investments in group companies
185
100
–
905
160
75
Current assets
175
90
85
1,080
250
160
Equity
Share capital – GHC1 ordinary shares
400
100 50
Retained earnings
560
90
70
960
190 115
Current liabilities
120 60
1,080 250
40
160
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2019
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Cash
$ 815,000
$ 700,000
Accounts receivable
1,128,000
1,168,000
Inventory
1,850,000
1,715,000
Property, plant, and equipment
3,307,000
2,967,000
Accumulated depreciation
(1,165,000)
(1,040,000)
Investment in Myers Co.
310,000
275,000
Loan receivable
250,000
—
Total assets
$6,495,000
$5,785,000
Accounts payable
$1,015,000
$ 955,000
Income taxes payable
30,000
50,000
Dividends payable
80,000
100,000
Lease...
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2020
2019
Increase
(Decrease)
Cash
$822,600
$700,100
$122,500
Accounts receivable
1,139,300
1,157,900
(18,600
)
Inventory
1,835,600
1,726,700
108,900
Property, plant, and equipment
3,276,300
2,980,900
295,400
Accumulated depreciation
(1,165,600
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(1,047,400
)
(118,200
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Investment in Myers Co.
312,200
272,500
39,700
Loan receivable
251,900
—
251,900
Total assets
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2020
2019
Increase
(Decrease)
Cash
$807,900
$696,100
$111,800
Accounts receivable
1,130,100
1,166,300
(36,200
)
Inventory
1,850,400
1,707,300
143,100
Property, plant, and equipment
3,324,100
2,995,100
329,000
Accumulated depreciation
(1,163,100
)
(1,032,700
)
(130,400
)
Investment in Myers Co.
308,700
277,600
31,100
Loan receivable
250,800
—
250,800
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$6,508,900
$5,809,700
$699,200
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Plant assets (net)
394,800
329,000
Current liabilities
85,994
73,000
Long-term liabilities
128,828
86,000
Common stock, $1 par
166,026
118,000
Retained earnings
138,552
152,000
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2019 as the base year. (Enter negative amounts and
percentages using either a negative sign preceding the number e.g.
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