Question

In: Accounting

Below is the information relating to The Funny Guys Ltd for the year ended 31 December...

Below is the information relating to The Funny Guys Ltd for the year ended 31 December 2019:

The Funny Guys Ltd

Comparative Statement of financial positions

as at 31 December 2019

2019 2018

Assets

Cash $1,885 $2,875

Accounts receivable 44,650 29,250

Merchandise inventory 60,950 51,325

Investments (long term) 40,300 43,500

Property, plant, and equipment 125,000 112,500

Accumulated depreciation (24,750) (20,000)

Total assets $248,035 $219,450

Liabilities and Equity

Accounts payable $26,350 $24,140

Income tax payable 3,635 0

Accrued expenses 6,050 9,415

Share capital 125,000 125,000

Retained earnings 87,000 60,895

Total liabilities and equity $248,035 $219,450

The Funny Guys Ltd

Statement of comprehensive income

for the year ended 31 December 2019

Sales $150,000

Less:

Cost of sales 49,730

Operating expenses (excluding depreciation) 7,335

Depreciation expense $4,750

Interest expense 2,720 64,535

Income before income taxes 85,465

Income tax expense 3,635

Profit after income tax $ 81,830

Additional data:

New equipment and machinery were purchased for cash during the year.
Investments were sold at cost.
There were not sales of equipment and machinery.
Accounts payable pertain to merchandise inventory creditors.

Required:

Prepare a Statement of cash flows for The Funny Guys Ltd for the year ended 31 December 2019 using the direct method.

Expert Solution

Notes:

Dividend = Opening Retained Earnings + Net Profits - Closing Retained Earnings
It is assumed that accrued liabilities are on account of operating expenses.
If you still have any doubt, feel free to ask in comment section.

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