Below are Sullivan Corp.'s comparative balance sheet accounts at December 31, 2020 and 2019,

	2020	2019	Increase (Decrease)
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 liability	400,000	—
Common stock, $1 par	500,000	500,000
Paid-in capital in excess of par - common	1,500,000	1,500,000
Retained earnings	2,970,000	2,680,000
Total liabilities and stockholders' equity	$6,495,000	$5,785,000

Additional information:

On December 31, 2019, Sullivan acquired 25% of Myers Co.'s common stock for $275,000. On that date, the carrying value of Myers's assets and liabilities, which approximated their fair values, was $1,100,000. Myers reported income of $140,000 for the year ended December 31, 2020. No dividend was paid on Myers's common stock during the year.
During 2020, Sullivan loaned $300,000 to TLC Co., an unrelated company. TLC made the first semiannual principal repayment of $50,000, plus interest at 10%, on December 31, 2020.
On 1/2/2020, Sullivan sold equipment costing $60,000 (adj basis $38,000) for $40,000 cash.
On December 31, 2020, Sullivan entered into a capital lease for an office building. The present value of the annual rental payments is $400,000, which equals the fair value of the building. Sullivan made the first rental payment of $60,000 when due on January 2, 2021.
Net income for 2020 was $370,000.
Sullivan declared and paid the following cash dividends for 2020 and 2019.

2020 2019

$80,000 $100,000

Declared 12/15/2020 12/15/2019

Paid 2/28/2021 2/28/2020

Required: Prepare a statement of cash flows for Sullivan Corp. for the year ended December 31, 2020, using the indirect method.

Expert Solution

Prepare a statement of cash flows for Sullivan Corp. for the year ended December 31, 2020, using the indirect method.

Refer to the below images for the above mentioned requirement, in a detailed way of solution with calculations.

ekkarill92 answered 1 year ago

The following are Flounder Corp.’s comparative balance sheet accounts at December 31, 2020 and 2019, with...

The following are Flounder Corp.’s comparative balance sheet accounts at December 31, 2020 and 2019, with a column showing the increase (decrease) from 2019 to 2020. COMPARATIVE BALANCE SHEETS 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 ) (1,047,400 ) (118,200 ) Investment in Myers Co. 312,200 272,500 39,700 Loan receivable 251,900 — 251,900 Total assets $6,472,300 $5,790,700 $681,600 Accounts...

The following are Waterway Corp.’s comparative balance sheet accounts at December 31, 2020 and 2019, with...

The following are Waterway Corp.’s comparative balance sheet accounts at December 31, 2020 and 2019, with a column showing the increase (decrease) from 2019 to 2020. COMPARATIVE BALANCE SHEETS 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 Total assets $6,508,900 $5,809,700 $699,200 Accounts...

3020 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 2019 and information relating to 2020 activities are presented 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 investments(carried at cost) 400,000 600,000 Plant assets 3,400,000 2,000,000 Accumulated depreciation (800,000) (900,000) Patent 180,000 200,000 Total assets $6,520,000 $ 4,320,000 Liabilities and Stockholders' Equity Accounts payable and accrued liabilities $1,660,000 ...

Problem 23-01 The following are Flounder Corp.’s comparative balance sheet accounts at December 31, 2020 and...

Problem 23-01 The following are Flounder Corp.’s comparative balance sheet accounts at December 31, 2020 and 2019, with a column showing the increase (decrease) from 2019 to 2020. COMPARATIVE BALANCE SHEETS 2020 2019 Increase (Decrease) Cash $812,400 $700,100 $112,300 Accounts receivable 1,135,500 1,158,500 (23,000 ) Inventory 1,844,800 1,713,900 130,900 Property, plant, and equipment 3,316,600 2,964,200 352,400 Accumulated depreciation (1,160,900 ) (1,040,300 ) (120,600 ) Investment in Myers Co. 309,500 274,000 35,500 Loan receivable 250,500 — 250,500 Total assets $6,508,400 $5,770,400...

Problem 23-01 The following are Kingbird Corp.’s comparative balance sheet accounts at December 31, 2020 and...

Problem 23-01 The following are Kingbird Corp.’s comparative balance sheet accounts at December 31, 2020 and 2019, with a column showing the increase (decrease) from 2019 to 2020. COMPARATIVE BALANCE SHEETS 2020 2019 Increase (Decrease) Cash $821,300 $694,000 $127,300 Accounts receivable 1,124,400 1,158,200 (33,800 ) Inventory 1,852,600 1,702,600 150,000 Property, plant, and equipment 3,300,400 2,951,400 349,000 Accumulated depreciation (1,174,500 ) (1,048,100 ) (126,400 ) Investment in Myers Co. 312,300 273,800 38,500 Loan receivable 250,100 — 250,100 Total assets $6,486,600 $5,731,900...

Problem 23-01 The following are Marigold Corp.’s comparative balance sheet accounts at December 31, 2020 and...

Problem 23-01 The following are Marigold Corp.’s comparative balance sheet accounts at December 31, 2020 and 2019, with a column showing the increase (decrease) from 2019 to 2020. COMPARATIVE BALANCE SHEETS 2020 2019 Increase (Decrease) Cash $810,600 $701,400 $109,200 Accounts receivable 1,135,300 1,156,300 (21,000 ) Inventory 1,850,800 1,708,800 142,000 Property, plant, and equipment 3,318,800 2,955,300 363,500 Accumulated depreciation (1,164,400 ) (1,035,600 ) (128,800 ) Investment in Myers Co. 307,400 277,400 30,000 Loan receivable 248,800 — 248,800 Total assets $6,507,300 $5,763,600...

Problem 23-01 The following are Shamrock Corp.’s comparative balance sheet accounts at December 31, 2020 and...

Problem 23-01 The following are Shamrock Corp.’s comparative balance sheet accounts at December 31, 2020 and 2019, with a column showing the increase (decrease) from 2019 to 2020. COMPARATIVE BALANCE SHEETS 2020 2019 Increase (Decrease) Cash $811,100 $702,700 $108,400 Accounts receivable 1,139,100 1,176,000 (36,900 ) Inventory 1,847,000 1,704,500 142,500 Property, plant, and equipment 3,317,700 2,945,400 372,300 Accumulated depreciation (1,158,000 ) (1,048,400 ) (109,600 ) Investment in Myers Co. 312,200 274,000 38,200 Loan receivable 250,000 — 250,000 Total assets $6,519,100 $5,754,200...

The following are Sheridan Corp.’s comparative balance sheet accounts at December 31, 2017 and 2016, with...

The following are Sheridan Corp.’s comparative balance sheet accounts at December 31, 2017 and 2016, with a column showing the increase (decrease) from 2016 to 2017. COMPARATIVE BALANCE SHEETS 2017 2016 Increase (Decrease) Cash $814,600 $706,000 $108,600 Accounts receivable 1,129,100 1,176,600 (47,500 ) Inventory 1,861,900 1,719,500 142,400 Property, plant, and equipment 3,335,800 2,940,300 395,500 Accumulated depreciation (1,159,600 ) (1,046,100 ) (113,500 ) Investment in Myers Co. 313,100 277,300 35,800 Loan receivable 249,200 — 249,200 Total assets $6,544,100 $5,773,600 $770,500 Accounts...

The following are Ayayai Corp.’s comparative balance sheet accounts at December 31, 2017 and 2016, with...

The following are Ayayai Corp.’s comparative balance sheet accounts at December 31, 2017 and 2016, with a column showing the increase (decrease) from 2016 to 2017. COMPARATIVE BALANCE SHEETS 2017 2016 Increase (Decrease) Cash $821,300 $694,000 $127,300 Accounts receivable 1,124,400 1,158,200 (33,800 ) Inventory 1,852,600 1,702,600 150,000 Property, plant, and equipment 3,300,400 2,951,400 349,000 Accumulated depreciation (1,174,500 ) (1,048,100 ) (126,400 ) Investment in Myers Co. 312,300 273,800 38,500 Loan receivable 250,100 — 250,100 Total assets $6,486,600 $5,731,900 $754,700 Accounts...

The following are Wildhorse Corp.’s comparative balance sheet accounts at December 31, 2017 and 2016, with...

The following are Wildhorse Corp.’s comparative balance sheet accounts at December 31, 2017 and 2016, with a column showing the increase (decrease) from 2016 to 2017. COMPARATIVE BALANCE SHEETS 2017 2016 Increase (Decrease) Cash $811,100 $702,700 $108,400 Accounts receivable 1,139,100 1,176,000 (36,900 ) Inventory 1,847,000 1,704,500 142,500 Property, plant, and equipment 3,317,700 2,945,400 372,300 Accumulated depreciation (1,158,000 ) (1,048,400 ) (109,600 ) Investment in Myers Co. 312,200 274,000 38,200 Loan receivable 250,000 — 250,000 Total assets $6,519,100 $5,754,200 $764,900 Accounts...

Question