Question

Question 11

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Flounder Inc., a greeting card company, had the following statements prepared as of December 31, 2020.

FLOUNDER INC. COMPARATIVE BALANCE SHEET AS OF DECEMBER 31, 2020 AND 2019
		12/31/20			12/31/19
Cash		$5,900			$6,900
Accounts receivable		61,400			50,800
Short-term debt investments (available-for-sale)		35,000			17,800
Inventory		40,000			59,400
Prepaid rent		5,000			3,900
Equipment		155,200			129,000
Accumulated depreciation—equipment		(35,000	)		(25,000	)
Copyrights		45,600			49,900
Total assets		$313,100			$292,700
Accounts payable		$46,300			$39,800
Income taxes payable		3,900			6,100
Salaries and wages payable		7,900			3,900
Short-term loans payable		8,000			10,100
Long-term loans payable		60,100			68,400
Common stock, $10 par		100,000			100,000
Contributed capital, common stock		30,000			30,000
Retained earnings		56,900			34,400
Total liabilities & stockholders’ equity		$313,100			$292,700	Question 11 --/40 View Policies Current Attempt in Progress Flounder Inc., a greeting card company, had the following statements prepared as of December 31, 2020. FLOUNDER INC. COMPARATIVE BALANCE SHEET AS OF DECEMBER 31, 2020 AND 2019 12/31/20 12/31/19 Cash $5,900 $6,900 Accounts receivable 61,400 50,800 Short-term debt investments (available-for-sale) 35,000 17,800 Inventory 40,000 59,400 Prepaid rent 5,000 3,900 Equipment 155,200 129,000 Accumulated depreciation—equipment (35,000 ) (25,000 ) Copyrights 45,600 49,900 Total assets $313,100 $292,700 Accounts payable $46,300 $39,800 Income taxes payable 3,900 6,100 Salaries and wages payable 7,900 3,900 Short-term loans payable 8,000 10,100 Long-term loans payable 60,100 68,400 Common stock, $10 par 100,000 100,000 Contributed capital, common stock 30,000 30,000 Retained earnings 56,900 34,400 Total liabilities & stockholders’ equity $313,100 $292,700 FLOUNDER INC. INCOME STATEMENT FOR THE YEAR ENDING DECEMBER 31, 2020 Sales revenue $338,600 Cost of goods sold 174,500 Gross profit 164,100 Operating expenses 119,100 Operating income 45,000 Interest expense $11,400 Gain on sale of equipment 1,900 9,500 Income before tax 35,500 Income tax expense 7,100 Net income $28,400 1.Dividends in the amount of $5,900 were declared and paid during 2020.2.Depreciation expense and amortization expense are included in operating expenses.3.No unrealized gains or losses have occurred on the investments during the year.4.Equipment that had a cost of $20,100 and was 70% depreciated was sold during 2020. 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).) FLOUNDER INC. Statement of Cash Flows choose the accounting period                                                          December 31, 2020For the Year Ended December 31, 2020For the Quarter Ended December 31, 2020 select an opening name for section one                                                          Cash at Beginning of PeriodCash at End of PeriodCash Flows from Financing ActivitiesCash Flows from Investing ActivitiesCash Flows from Operating ActivitiesNet Cash Provided by Financing ActivitiesNet Cash Provided by Investing ActivitiesNet Cash Provided by Operating ActivitiesNet Cash Used by Financing ActivitiesNet Cash Used by Investing ActivitiesNet Cash Used by Operating ActivitiesNet Decrease in CashNet Increase in Cash

Answer 1

FLOUNDER INC.
Statement of Cash Flows
FOR THE YEAR ENDING DECEMBER 31, 2020
Cash flows from operating activities
Net Income		28,400
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation expense	24,070
Amortization expense	4,300
Gain on sale of equipment	(1,900)
Increase in accounts receivable	(10,600)
Decrease in inventory	19,400
Increase in prepaid rent	(1,100)
Increase in accounts payable	6,500
Decrease in income tax payable	(2,200)
Increase in salaries and wages payable	4,000
		42,470
Net cash provided by operating activities		70,870
Cash flows from investing activities
Purchase of short-term debt investments	(17,200)
Sale of equipment	7,930
Purchase of equipment	(46,300)
Net cash used by investing activities		(55,570)
Cash flows from financing activities
Payment of short-term loans payable	(2,100)
Payment of long-term loans payable	(8,300)
Payment of cash dividends	(5,900)
Net cash provided by financing activities		(16,300)
Net increase/(decrease) in cash		(1,000)
Cash balance at the beginning of year		6,900
Cash balance at the end of year		5,900