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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

$764,900

Accounts payable

$1,010,900

$960,700

$50,200

Income taxes payable

29,900

50,500

(20,600

)

Dividends payable

80,600

100,700

(20,100

)

Lease liabililty

432,100

432,100

Common stock, $1 par

500,000

500,000

Paid-in capital in excess of par—common stock

1,499,300

1,499,300

Retained earnings

2,966,300

2,643,000

323,300

   Total liabilities and stockholders’ equity

$6,519,100

$5,754,200

$764,900

Additional information:

1.

On December 31, 2019, Shamrock acquired 25% of Myers Co.’s common stock for $274,000. On that date, the carrying value of Myers’s assets and liabilities, which approximated their fair values, was $1,096,000. Myers reported income of $152,800 for the year ended December 31, 2020. No dividend was paid on Myers’s common stock during the year.

2.

During 2020, Shamrock loaned $332,200 to TLC Co., an unrelated company. TLC made the first semiannual principal repayment of $82,200, plus interest at 10%, on December 31, 2020.

3.

On January 2, 2020, Shamrock sold equipment costing $59,800, with a carrying amount of $38,000, for $40,100 cash.

4.

On December 31, 2020, Shamrock entered into a capital lease for an office building. The present value of the annual rental payments is $432,100, which equals the fair value of the building. Shamrock made the first rental payment of $60,300 when due on January 2, 2021.

5.

Net income for 2020 was $403,900.

6.

Shamrock declared and paid the following cash dividends for 2020 and 2019.

2020

2019

Declared

December 15, 2020

December 15, 2019

Paid

February 28, 2021

February 28, 2020

Amount

$80,600

$100,700


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

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