Question

Grape Inc. had the following balance sheet at December 31, 2019:

Grape INC. BALANCE SHEET DECEMBER 31, 2019

Cash $ 31,000

Accounts payable $ 61,000

Accounts receivable 56,800

Notes payable (long-term) 76,000

Investments 86,000

Common stock 200,000

Plant assets (net) 138,500

Retained earnings 41,300

Land 66,000

Total assets and Total Liabilities and Stockholders' Equity $378,300 $378,300

During 2020, the following occurred:

1. Grape liquidated its available-for-sale investment portfolio at a gain of $15,000.

2. A tract of land was purchased for $61,000 cash.

3. An additional $15,200 in common stock was issued at par.

4. Dividends totaling $41,000 were declared and paid to stockholders.

5. Net income for 2020 was $46,000, including $8,000 in depreciation expense.

6. Land was purchased through the issuance of $195,000 in additional notes payable.

7. At December 31, 2020, Cash was $68,000, Accounts Receivable was $84,000, and Accounts Payable was $72,000.

Instructions:

(a) Prepare the balance sheet as it would appear at December 31, 2020

(b) Prepare a statement of cash flows for the year 2020 for Grape. Prepare all in good form.

Answer 1