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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

	$

$

Expert Solution

ekkarill92 answered 3 years ago

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