Question

The following are Flounder 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		$822,600			$700,100			$122,500
Accounts receivable		1,139,300			1,157,900			(18,600	)
Inventory		1,835,600			1,726,700			108,900
Property, plant, and equipment		3,276,300			2,980,900			295,400
Accumulated depreciation		(1,165,600	)		(1,047,400	)		(118,200	)
Investment in Myers Co.		312,200			272,500			39,700
Loan receivable		251,900			—			251,900
Total assets		$6,472,300			$5,790,700			$681,600
Accounts payable		$1,016,000			$949,400			$66,600
Income taxes payable		30,200			49,700			(19,500	)
Dividends payable		79,200			99,100			(19,900	)
Lease liabililty		355,000			—			355,000
Common stock, $1 par		500,000			500,000			—
Paid-in capital in excess of par—common stock		1,501,300			1,501,300			—
Retained earnings		2,990,600			2,691,200			299,400
Total liabilities and stockholders’ equity		$6,472,300			$5,790,700			$681,600

Additional information:

1.		On December 31, 2019, Flounder acquired 25% of Myers Co.’s common stock for $272,500. On that date, the carrying value of Myers’s assets and liabilities, which approximated their fair values, was $1,090,000. Myers reported income of $158,800 for the year ended December 31, 2020. No dividend was paid on Myers’s common stock during the year.
2.		During 2020, Flounder loaned $255,500 to TLC Co., an unrelated company. TLC made the first semiannual principal repayment of $3,600, plus interest at 10%, on December 31, 2020.
3.		On January 2, 2020, Flounder sold equipment costing $59,600, with a carrying amount of $37,800, for $39,900 cash.
4.		On December 31, 2020, Flounder entered into a capital lease for an office building. The present value of the annual rental payments is $355,000, which equals the fair value of the building. Flounder made the first rental payment of $60,100 when due on January 2, 2021.
5.		Net income for 2020 was $378,600.
6.		Flounder 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		$79,200		$99,100

Prepare a statement of cash flows for Flounder Corp. for the year ended December 31, 2020, 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).)

Answer 1