Mortonson Company has not yet prepared a statement of cash flows for the 2020 fiscal year. Comparative
Question:
Mortonson Company has not yet prepared a statement of cash flows for the 2020 fiscal year. Comparative balance sheets as of December 31, 2019 and 2020, and a statement of income and retained earnings for the year ended December 31, 2020, are presented as follows.
Instructions
Prepare a statement of cash flows using the direct method. Changes in accounts receivable and accounts payable relate to sales and cost of goods sold. Do not prepare a reconciliation schedule.
Transcribed Image Text:
Mortonson Company Statement of Income and Retained Earnings For the Year Ended December 31, 2020 ($000 omitted) Sales revenue Expenses Cost of goods sold $3,800 $1,200 Salaries and benefits 725 Heat, light, and power Depreciation Property taxes Patent amortization 75 80 19 25 Miscellaneous expenses 10 2,164 Interest 30 Income before income taxes 1,636 Income taxes 818 Net income 818 Retained earnings–Jan. 1, 2020 310 1,128 Stock dividend declared and issued 600 $ 528 Retained earnings–Dec. 31, 2020 Mortonson Company Comparative Balance Sheets As of December 31 ($000 omitted) Assets 2020 2019 Current assets Cash $ 333 $ 100 U.S. Treasury notes (available-for-sale) 10 50 Accounts receivable 780 500 Inventory 720 560 Total current assets 1,843 1,210 Long-term assets Land 150 70 Buildings and equipment Accumulated depreciation-buildings and equipment Patents (less amortization) 910 600 (200) (120) 105 130 Total long-term assets 965 680 Total assets $2,808 $1,890 Liabilities and Stockholders' Equity Current liabilities Accounts payable Income taxes payable Notes payable 330 40 30 320 320 Total current liabilities 780 680 Long-term notes payable–due 2022 200 200 Total liabilities 980 880 Stockholders' equity Common stock 1,300 700 Retained earnings Total stockholders' equity 528 310 1,828 1,010 Total liabilities and stockholders' equity $2,808 $1,890
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a Sales 3800 Deduct ending accounts receivable 780 3020 Add beginning accounts receivable 500 Cash r...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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