Question

Citi Company's Comparative balance sheet and income statement are presented below.

	2020	2019
Cash	6,000	9,000
A/R	62,000	49,000
Inventory	40,000	60,000
PPd Rent	5,000	4,000
Investment-Chase Co.	35,000	18,000
Equipment	154,000	130,000
Acc. Dep	(35,000)	(25,000)
Copy rights	46,000	50,000
Total assets	313,000	295,000
Accounts payable	45,000	42,000
Interest payable	1,000	---
Wage payable	7,000	4,000
Income tax payable	5,000	6,000
Notes payable	67,000	77,000
Common stock	100,000	100,000
PIC-Common stock	30,000	30,000
Retained earnings	58,000	36,000
Total liabilities	313,000	295,000

Income statement for 2020:

Sale Revenue	338,150
COGS	(175,000)
Wage expense	(40,000)
Rent expense	(45,000)
Depreciation expense	(31,000)
Amortization expense	(4,000)
gain on sale of equipment	2,000
interest expense	(11,400)
income tax expense	(6,750)
Net income	27,000

Additional information:

1. Equipment with an original cost of $30,000 was sold for $11,000.
2. Additional equipment of $54,000 was purchased in cash.
3. Additional $17,000 was invested in company’s investment in Chase Co.
4. A total of $10,000 was used to repay notes payable.
5. $5,000 dividends were announced and paid to common shareholders.

Required:

• Prepare the statement of cash flows for year 2020 using indirect method.
• What is the amount of cash receipts from customers?
• What is the amount of cash paid to suppliers?

Answer 1