In: Accounting
Assignment 3:
P13-12A The income statement and unclassified statement of financial position for E-Perform, Inc. follow:
E-PERFORM, INC. Statement of Financial Position December 31 |
||
2018 |
2017 |
|
Assets |
||
Cash |
$ 97,800 |
$ 48,400 |
Held for trading investments |
128,000 |
114,000 |
Accounts receivable |
75,800 |
43,000 |
Inventory |
122,500 |
92,850 |
Prepaid expenses |
18,400 |
26,000 |
Equipment |
270,000 |
242,500 |
Accumulated depreciation |
(50,000) |
(52,000) |
Total assets |
$662,500 |
$514,750 |
Liabilities and Shareholders' Equity |
||
Accounts payable |
$ 93,000 |
$ 77,300 |
Accrued liabilities |
11,500 |
7,000 |
Bank loan payable |
110,000 |
150,000 |
Common shares |
200,000 |
175,000 |
Retained earnings |
248,000 |
105,450 |
Total liabilities and shareholders' equity |
$662,500 |
$514,750 |
E-PERFORM, INC. Income Statement Year Ended December 31, 2018 |
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Sales |
$492,780 |
|
Cost of goods sold |
185,460 |
|
Gross profit |
307,320 |
|
Operating expenses |
116,410 |
|
Income from operations |
190,910 |
|
Other revenues and expenses |
||
Unrealized gain on held for trading investments |
$14,000 |
|
Interest expense |
(4,730) |
9,270 |
Income before income tax |
200,180 |
|
Income tax expense |
45,000 |
|
Net income |
$155,180 |
Additional information:
Instructions
(a) Prepare the statement of cash flows, using the direct method.
(b) E-Perform's cash position more than doubled between 2017 and 2018. Identify the primary reason(s) for this significant increase.