The comparative balance sheets for 2021 and 2020 are given below for Surmise Company. Net income...

 

Transcribed Image Text:

The comparative balance sheets for 2021 and 2020 are given below for Surmise Company. Net income for 2021 was $54 million. SURMISE COMPANY Comparative Balance Sheets December 31, 2021 and 2020 ($ in millions) 2021 2020 $ 43 $ 49 76 80 (8) 5 169 51 72 Buildings and equipment 297 Less: Accumulated depreciation (97) Patent 11 $619 Assets Cash Accounts receivable Less: Allowance for uncollectible accounts Prepaid expenses Inventory Long-term investment Land Liabilities Accounts payable Accrued liabilities Notes payable Lease liability Bonds payable Shareholders' Equity Common stock Paid-in capital-excess of par Retained earnings $ Cash flows from operating activities: Net income Adjustments for noncash effects: 5 $15 3 22 83 51 56 249 150 $619 ~ MONNAÕ-||| SURMISE COMPANY Statement of Cash Flows For year ended December 31, 2021 ($ in millions) 6 0 0 93 50 205 155 $524 Required: Prepare the statement of cash flows of Surmise Company for the year ended December 31, 2021. Use the indirect method to present cash flows from operating activities because you do not have sufficient information to use the direct method. You will need to make reasonable assumptions concerning the reasons for changes in some account balances. A spreadsheet or T-account analysis will be helpful. (Hint: The right to use a building was acquired with a seven-year lease agreement. Annual lease payments of $9 million are paid at January 1 of each year starting in 2021.) (Enter your answers in milli (i.e., 10,000,000 should be entered as 10). Amounts to deducted should be indicated with a minus sign.) The comparative balance sheets for 2021 and 2020 are given below for Surmise Company. Net income for 2021 was $54 million. SURMISE COMPANY Comparative Balance Sheets December 31, 2021 and 2020 ($ in millions) 2021 2020 $ 43 $ 49 76 80 (8) 5 169 51 72 Buildings and equipment 297 Less: Accumulated depreciation (97) Patent 11 $619 Assets Cash Accounts receivable Less: Allowance for uncollectible accounts Prepaid expenses Inventory Long-term investment Land Liabilities Accounts payable Accrued liabilities Notes payable Lease liability Bonds payable Shareholders' Equity Common stock Paid-in capital-excess of par Retained earnings $ Cash flows from operating activities: Net income Adjustments for noncash effects: 5 $15 3 22 83 51 56 249 150 $619 ~ MONNAÕ-||| SURMISE COMPANY Statement of Cash Flows For year ended December 31, 2021 ($ in millions) 6 0 0 93 50 205 155 $524 Required: Prepare the statement of cash flows of Surmise Company for the year ended December 31, 2021. Use the indirect method to present cash flows from operating activities because you do not have sufficient information to use the direct method. You will need to make reasonable assumptions concerning the reasons for changes in some account balances. A spreadsheet or T-account analysis will be helpful. (Hint: The right to use a building was acquired with a seven-year lease agreement. Annual lease payments of $9 million are paid at January 1 of each year starting in 2021.) (Enter your answers in milli (i.e., 10,000,000 should be entered as 10). Amounts to deducted should be indicated with a minus sign.)

Answer rating: 100% (QA)

solution SURMISE COMPANY Statement of cash flows For the year ended December 312021 in millions ope... View the full answer