Question

The following details are for questions 24–26. Each individual question will appear below the details.

The Not-too-tough company started its operation in 2018. Its balance sheet for December 31, 2018, showed the following account balances (there were no other accounts listed, numbers are in thousands):

Assets	2019
Cash and cash equivalents	400
Inventory	59
Accounts receivable	90
Property, plants, and equipment	100
Less: accumulated depreciation	(10)
Property and equipment – net	90
Prepaid rent	0
Total Assets	639

Liabilities and Equity	2019
Accounts payable	50
Advance from customers	40
Wages payables	6
Paid-in capital	350
Retained earnings	193
Total Liabilities and Shareholders’ Equity	639

During 2019 the following transactions occurred:

1. Rent for 24 months, starting January 1, 2019, in the amount of $48, was paid in cash.

2. On July 31, 2019, the company enters into a new labor contract with the employees’ union that calls for a $15 increase in wages, effective February 1, 2020.

3. Sales, all on credit, were $850. Collections from customers were $720.

4. In addition to the transactions described in item 3 above, products were shipped to the customer who paid $40 in advance (see December 31, 2018 balances). The selling price was $120, and the customer will pay the balance in early 2020.

5. The company purchased $550 worth of inventory, on account. Payments on accounts payable were $470.

6. Based on a physical count, inventory balance as of December 31, 2019 was $85. The market value of these inventories was $90.

7. The employees earned $54 as wages. Cash wage payments to employees were $57.

8. Depreciation for the year equals $15.

9. A dividend of $55 was declared and paid during 2019.

Question

Prepare the Balance Sheet, Income Statement and Cash Flow from operations using the indirect method.

Type your answer in the text box below. Present the answer as a list and don't worry about left or right indentation.

Answer 1