In: Accounting
Question 23
The following information is taken from Debra Corporation's
financial statements:
December 31 | ||||||
2021 |
2020 |
|||||
Cash |
$ 68,670 |
$ 29,430 |
||||
Accounts receivable |
111,180 |
87,200 |
||||
Allowance for doubtful accounts | (4,905) | (3,379) | ||||
Inventory |
174,400 |
190,750 |
||||
Prepaid expenses |
8,175 |
7,412 |
||||
Land |
109,000 |
65,400 |
||||
Buildings |
320,460 |
265,960 |
||||
Accumulated depreciation | (34,880) | (14,170) | ||||
Patents |
21,800 |
38,150 |
||||
$773,900 |
$666,753 |
|||||
Accounts payable |
$ 98,100 |
$ 91,560 |
||||
Accrued liabilities |
58,860 |
68,670 |
||||
Bonds payable |
136,250 |
65,400 |
||||
Common stock |
109,000 |
109,000 |
||||
Retained earnings―appropriated |
87,200 |
10,900 |
||||
Retained earnings―unappropriated |
300,840 |
329,943 |
||||
Treasury stock, at cost | (16,350) | (8,720) | ||||
$773,900 |
$666,753 |
For 2021 Year |
|||
Net income |
$85,347 |
||
Depreciation expense |
20,710 |
||
Amortization of patents |
5,450 |
||
Cash dividends declared and paid |
38,150 |
||
Gain or loss on sale of patents |
none |
Prepare a statement of cash flows for Debra Corporation for the
year 2021. (Use the indirect method.)
Statement of Cashflow (Indirect Method) | |||
For the year ended dec 31,2021 | |||
Net Income | $ 85,347.00 | ||
Adjustment to reconcile Net income to net cash provided by operating Activities | |||
Depreciation Expense | $ 20,710.00 | ||
Amortisation of Patents | $ 5,450.00 | ||
Increase in Account receivable Net of allowance ( Beg Bal. $83,821-End bal $ 106,275) | $ -22,454.00 | ||
Decrease in Inventory (Beg Bal. $190,750-End Bal $174,400) | $ 16,350.00 | ||
Increase in prepaid exp ( Beg Bal. $7,412-End bal $ 8,175) | $ -763.00 | ||
Decrease in accrued liabiltiei (Beg Bal. $68,670-End Bal $58,860) | $ -9,810.00 | ||
Increase in Account Payable ( Beg Bal. $91,560- End Bal. $98,100) | $ 6,540.00 | $ 16,023.00 | |
Net Cash flow from operating Activities | $ 101,370.00 | A | |
Cashflows from Investing Activities | |||
Purchase of Building (Beg Bal. 265,960-End Bal. 320,460 | $ -54,500.00 | ||
Purchase of Land (Beg Bal $65,400-End Bal $109,000) | $ -43,600.00 | ||
Proceed from sale of Patents -Refer Table | $ 10,900.00 | $ -87,200.00 | |
Net Cashflows from Investing Activities | $ -87,200.00 | B | |
Cashflows from Financing Activities | |||
Payment of Dividend | $ -38,150.00 | ||
Purchase of Treasury Stock (Beg.Bal $ 8,720-End Bal $ 16,350) | $ -7,630.00 | ||
Issuance of Bond (Beg. Bal $65,400-End Bal.$136,250) | $ 70,850.00 | $ 25,070.00 | |
Net Cashflows from Financing Activities | $ 25,070.00 | C | |
Net Increase/(Decrease) in Cash | $ 39,240.00 | A+B+C | |
Beginning Cash in Hand | $ 29,430.00 | ||
Ending Cash in Hand | $ 68,670.00 | $ 39,240.00 | |
Net Increase/(Decrease) in Cash |
Calculation of Patent
Patent | |
Beg Bal | $ 38,150.00 |
Less Amortisation | $ 5,450.00 |
Less End Bal | $ 21,800.00 |
Proceed from sale | $ 10,900.00 |