Problem 23-06 Comparative balance sheet accounts of Coronado Inc. are presented below. CORONADO INC. COMPARATIVE BALANCE...

Problem 23-06

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

CORONADO INC. COMPARATIVE BALANCE SHEET ACCOUNTS AS OF DECEMBER 31, 2020 AND 2019
	December 31
Debit Accounts	2020	2019
Cash	$42,300	$34,000
Accounts Receivable	70,600	59,600
Inventory	30,000	23,900
Equity investments	22,500	38,700
Machinery	29,700	18,600
Buildings	67,900	56,600
Land	7,500	7,500
	$270,500	$238,900

Credit Accounts
Allowance for Doubtful Accounts	$2,200	$1,500
Accumulated Depreciation—Machinery	5,700	2,300
Accumulated Depreciation—Buildings	13,600	8,900
Accounts Payable	34,800	24,500
Accrued Payables	3,300	2,700
Long-Term Notes Payable	21,200	31,200
Common Stock, no-par	150,000	125,000
Retained Earnings	39,700	42,800
	$270,500	$238,900

Additional data (ignoring taxes):

1.		Net income for the year was $43,100.
2.		Cash dividends declared and paid during the year were $21,200.
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 $25,000 were sold during the year for $28,700. No unrealized gains and losses were recorded on these investments in 2020.
5.		Machinery that cost $3,700, on which $750 of depreciation had accumulated, was sold for $2,150.

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

Sales revenue			$544,200
Less: Cost of goods sold			383,000
Gross margin			161,200
Less: Operating expenses (includes $8,850 depreciation and $5,733 bad debts)			121,000
Income from operations			40,200
Other: Gain on sale of investments	$3,700
Loss on sale of machinery	(800	)	2,900
Net income			$43,100

(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).)

Expert Solution

ekkarill92 answered 1 year ago

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