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Comparative balance sheet accounts of Oriole Inc. are presented below. ORIOLE INC. COMPARATIVE BALANCE SHEET ACCOUNTS...

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

ORIOLE INC.
COMPARATIVE BALANCE SHEET ACCOUNTS
AS OF DECEMBER 31, 2020 AND 2019

December 31
Debit Accounts

2020

2019
Cash

$42,200

$33,700
Accounts Receivable

70,800

60,200
Inventory

30,000

24,300
Equity investments

22,400

38,300
Machinery

30,100

18,800
Buildings

67,000

56,100
Land

7,500

7,500

$270,000

$238,900
Credit Accounts
Allowance for Doubtful Accounts

$2,200

$1,500
Accumulated Depreciation—Machinery

5,700

2,300
Accumulated Depreciation—Buildings

13,600

9,000
Accounts Payable

35,100

24,700
Accrued Payables

3,300

2,600
Long-Term Notes Payable

21,200

31,000
Common Stock, no-par

150,000

125,000
Retained Earnings

38,900

42,800

$270,000

$238,900


Additional data (ignoring taxes):

1. Net income for the year was $42,400.
2. Cash dividends declared and paid during the year were $21,300.
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 $24,800 were sold during the year for $28,500. 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.


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

Sales revenue

$541,000
Less: Cost of goods sold

381,800
Gross margin

159,200
Less: Operating expenses (includes $8,750 depreciation and $5,735 bad debts)

119,700
Income from operations

39,500
Other: Gain on sale of investments

$3,700
          Loss on sale of machinery

(800

)

2,900
Net income

$42,400


(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).)

ORIOLE INC.
Statement of Cash Flows


(Indirect Method)

$
Adjustments to reconcile net income to

$

$

Solutions

Expert Solution

ekkarill92 answered 1 year ago
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