Question
In: Accounting
The following are relevant account balances from ABC's comparative balance sheet and 2019 income statement ABC's...
The following are relevant account balances from ABC's comparative balance sheet and 2019 income statement
ABC's balance sheet
| December 31,2019 |
January 1, 2019 |
|
|---|---|---|
| Cash | $ 6,000 | $ 9,000 |
| Accounts Receivable | $ 8,000 | $ 12,000 |
| Merchandise Inventory | $ 29,000 | $ 18,000 |
| Prepaid Rent | $ 6,000 | $ 4,000 |
| Equipment | $ 100,000 | $ 80,000 |
| Accumulated Depreciation | $ (28,000) | $ (13,000) |
| Total Assets | $ 121,000 | $110,000 |
| Accounts Payable | $ 9,000 | $ 25,000 |
| Unearned Revenue | $ 6,000 | $ 4,000 |
| Common Stock | $ 38,000 | $ 32,000 |
| Retained Earnings | $ 68,000 | $ 49,000 |
| Total Liabilities and Shareholders Equity | $ 121,000 | $ 110,000 |
Other Information: No equipment was sold or retired during 2019. ABC's net income for 2019 was $33,000
Prepare the statement of cash flow for 2019
Solutions
Expert Solution
| ABC | ||
| Statement of Cash Flows | ||
| For the Year Ended December 31, 2019 | ||
| Cash Flows from Operating Activities: | ||
| Net income | 33000 | |
| Adjustments to reconcile net income to net cash flow from operations: | ||
| Depreciation expense ($28000 - $13000) | 15000 | |
| Decrease in Accounts Receivable | 4000 | |
| Increase in Merchandise Inventory | -11000 | |
| Increase in Prepaid Rent | -2000 | |
| Decrease in Accounts Payable | -16000 | |
| Increase in Unearned Revenue | 2000 | -8000 |
| Net cash flow from operating activities | 25000 | |
| Cash Flows from Investing Activities: | ||
| Purchase of equipment | -20000 | |
| Net cash flow from investing activities | -20000 | |
| Cash Flows from Financing Activities: | ||
| Issuance of common stock | 6000 | |
| Payment of dividends ($49000 + $33000 - $68000) | -14000 | |
| Net cash flow from financing activities | -8000 | |
| Net increase (decrease) in cash | -3000 | |
| Cash balance, January 1, 2019 | 9000 | |
| Cash balance, December 31, 2019 | 6000 | |
ekkarill92 answered 2 years agoRelated Solutions
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51,300
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Accounts receivable 322
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Inventory 166
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Total current assets 509
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$
2
$
13
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310
231
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160
199
Prepaid expenses
10
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482
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Property, plant, and equipment
511
432
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76,680
Inventory
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47,940
Prepaid expenses
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