ABC Company Balance Sheets Change Dec 31 2020 Dec 31 2019 in 2020 Assets Cash 13,000...
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ABC Company Balance Sheets Change Dec 31 2020 Dec 31 2019 in 2020 Assets Cash 13,000 17,000 Accounts receivable 27,000 33,000 Inventory 99,000 71,000 Prepaid advertising 17,000 14,000 Long-term investments -- available for sale 35,000 46,000 Fair value adjustments to investments (6,000) PPE Total assets Liabilities and Equity Accounts payable Wages payable Income tax payable Common stock Retained earnings 183,000 135,000 Accumulated depreciation (77,000) (66,000) 297,000 244,000 32,000 19,000 11,000 7,500 8,000 9,500 144,000 130,000 102,000 84,000 (6,000) 297,000 244,000 Unrealized loss on investments Total liabilities and equity ABC Company Income Statement For the period ended December 31, 2020 Sales 390,000 Dividend income 10,000 400,000 Cost of goods sold Wages expense 238,000 87,000 Advertising expense 15,000 Depreciation expense 16,000 Income tax expense 22,000 Loss on sale of investments 7,000 Net income 15,000 Effect on Cash Other Information: The company declared and paid $23,000 in cash dividends during 2020 PPE was purchased for cash in 2020. Additional common stock was issued for cash. Investments costing $11,000 and carried at $10,000 were sold for cash at a $2,000 realized loss in 2020. Requirements: 1. Identify the change in account balances for 2020 and the effect that change will have on Cash. 2. Compute ABC's operating cash flow for 2020 using the indirect method. 3. Compute ABC's operating cash flow for 2020 using the direct method. ABC Company Statement of Cash Flow Indirect Method Dec 31 2020 Net income Depreciation expense Loss on sale of investments Accounts receivable Inventory Prepaid advertising Accounts payable Wages payable Income tax payable Cash from operating activities ABC Company Statement of Cash Flow Direct Method Cash received from customers Cash received as dividends Cash paid for merchandise purchases Cash paid to employees Cash paid for advertising Cash paid for income taxes Dec 31 2020 ABC Company Balance Sheets Change Dec 31 2020 Dec 31 2019 in 2020 Assets Cash 13,000 17,000 Accounts receivable 27,000 33,000 Inventory 99,000 71,000 Prepaid advertising 17,000 14,000 Long-term investments -- available for sale 35,000 46,000 Fair value adjustments to investments (6,000) PPE Total assets Liabilities and Equity Accounts payable Wages payable Income tax payable Common stock Retained earnings 183,000 135,000 Accumulated depreciation (77,000) (66,000) 297,000 244,000 32,000 19,000 11,000 7,500 8,000 9,500 144,000 130,000 102,000 84,000 (6,000) 297,000 244,000 Unrealized loss on investments Total liabilities and equity ABC Company Income Statement For the period ended December 31, 2020 Sales 390,000 Dividend income 10,000 400,000 Cost of goods sold Wages expense 238,000 87,000 Advertising expense 15,000 Depreciation expense 16,000 Income tax expense 22,000 Loss on sale of investments 7,000 Net income 15,000 Effect on Cash Other Information: The company declared and paid $23,000 in cash dividends during 2020 PPE was purchased for cash in 2020. Additional common stock was issued for cash. Investments costing $11,000 and carried at $10,000 were sold for cash at a $2,000 realized loss in 2020. Requirements: 1. Identify the change in account balances for 2020 and the effect that change will have on Cash. 2. Compute ABC's operating cash flow for 2020 using the indirect method. 3. Compute ABC's operating cash flow for 2020 using the direct method. ABC Company Statement of Cash Flow Indirect Method Dec 31 2020 Net income Depreciation expense Loss on sale of investments Accounts receivable Inventory Prepaid advertising Accounts payable Wages payable Income tax payable Cash from operating activities ABC Company Statement of Cash Flow Direct Method Cash received from customers Cash received as dividends Cash paid for merchandise purchases Cash paid to employees Cash paid for advertising Cash paid for income taxes Dec 31 2020
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Related Book For
Accounting Principles
ISBN: 978-1119411482
13th edition
Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso
Posted Date:
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