Michaels Company had available at the end of 2020 the following information. Instructions Prepare a statement of
Question:
Michaels Company had available at the end of 2020 the following information.
Instructions
Prepare a statement of cash flows for Michaels Company using the direct method accompanied by a reconciliation schedule. Assume the short-term investments are debt securities, classified as available-for-sale.
Transcribed Image Text:
Michaels Company Comparative Balance Sheets As of December 31, 2020 and 2019 2020 2019 $ 10,000 $ 4,000 Cash Accounts receivable 20,500 12,950 30,000 Short-term investments 22,000 42,000 Inventory Prepaid rent Prepaid insurance Supplies Land 35,000 3,000 12,000 2,100 900 1,000 750 125,000 175,000 Buildings Accumulated depreciation-buildings Equipment Accumulated depreciation-equipment 350,000 350,000 (105,000) (87,500) 525,000 400,000 (130,000) (112,000) Patents 45,000 50,000 Total assets $910,600 $871,100 $ 22,000 $ 32,000 4,000 Accounts payable Income taxes payable Salaries and wages payable Short-term notes payable Long-term notes payable Bonds payable Premium on bonds payable 5,000 5,000 3,000 10,000 10,000 70,000 60,000 400,000 400,000 20,303 25,853 Common stock 240,000 220,000 Paid-in capital in excess of par-common stock Retained earnings 25,000 17,500 123,297 88,747 Total liabilities and stockholders' equity $910,600 $871,100 Michaels Company Income Statement and Dividend Information For the Year Ended December 31, 2020 Sales revenue $1,160,000 Cost of goods sold 748,000 Gross margin Operating expenses Selling expenses Administrative expenses Depreciation/Amortization expense Total operating expenses 412,000 $ 79,200 156,700 40,500 276,400 Income from operations Other revenues/expenses 135,600 Gain on sale of land 8,000 Gain on sale of short-term investment 4,000 Dividend revenue 2,400 Interest expense (51,750) (37,350) Income before taxes 98,250 Income tax expense 39,400 Net income 58,850 Dividends to common stockholders (24,300) To retained earnings 34,550
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MICHAELS COMPANY Statement of Cash Flows For the Year Ended December 31 2020 Direct Method Cash flows from operating activities Cash receipts Cash rec...View the full answer
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Related Book For
Intermediate Accounting
ISBN: 978-1119503668
17th edition
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfiel
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