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The Comparative Balance Sheet, Income Statement and supplemental date for Gallagher Corporation as of December 31,...

The Comparative Balance Sheet, Income Statement and supplemental date for Gallagher Corporation as of December 31, 2021 are provided.

GALLAGHER CORPORATION

Comparative Balance Sheet

December 31

2021 2020

Assets

Cash . $ 65,000 $ 51,000

Accounts Receivable (net) . 145,000 122,000

Inventory . 75,000 61,000

Debt Investments (available for sale) . 46,000 76,000

Equipment . 70,000 48,000

Accumulated Depreciation: Equipment . (20,000) (14,000)

Buildings . 145,000 145,000

Accumulated Depreciation: Buildings . (37,000) (28,000)

Land . 40,000 25,000

Intangibles . 8,000 9,000

Total Assets . $ 537,000 $ 495,000

Liabilities

Accounts Payable . $ 66,000 $ 60,000

Income Taxes Payable 12,000 10,000

Long-Term Notes Payable 62,000 70,000

Total Liablilites $ 140,000 $ 140,000

Stockholders' Equity

Common Stock 310,000 260,000

Retained Earnings 92,000 95,000

Treasury Stock (5,000) 0

Total Stockholders' Equity 397,000 355,000

Total Liabilities and Stockholders' Equity $ 537,000 $ 495,000

GALLAGHER CORPORATION

Income Statement

For the Year Ending December 31, 2021

Sales revenue $ 950,000

Less: Cost of Goods Sold 600,000

Gross Profit 350,000

Less Operating Expenses 250,000

Income from Operations 100,000

Other revenues and expenses

Gain on sale of investments $ 15,000

Loss on sale of equipment (3,000)

12,000

Income before taxes 112,000

Income taxes 45,000

Net Income $ 67,000

Additional Information

1. Equipment costing $10,000 was sold and was 60% depreciated. New equipment was also purchased during the year

2. Cash dividends were declared and paid.

3. Common stock was exchanged for Land.

4. Debt investments costing $35,000 were sold during the year. New debt investment were purchased during the year for $5,000.

5. Accounts receivable are shown net of the allowance for doubtful accounts, because there were no account write-offs during the year.

6. Operating expenses include: Depreciation Expense, $21,000, Amortization Expense, and Interest Expense, $3,300

Instructions:

1. Prepare the Statement of Cash Flows for Gallagher Corporation using the "indirect" method. You need to include Supplemental Cash Disclosure information and Non Cash Investing and Financing Activities.

2. Prepare the Operating Activities Section using the "direct" method. Show supporting calculations

Solutions

Expert Solution

ekkarill92 answered 1 year ago
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