Big Cheese Company uses the indirect method to prepare its statement of cash flows. Please refer...

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Big Cheese Company uses the indirect method to prepare its statement of cash flows. Please refer to the following information for the year 2020. Cash Accounts receivable Inventory Total Current Assets Property, Plant & Equipment (net) Total assets Accounts payable Accrued liabilities Total Current Liabilities Long-term notes payable Total liabilities Common shares Retained earnings Total equity Total liabilities and equity Total revenues Revenues and gains: Sales revenue Interest revenue Gain on sale of plant assets Expenses: Big Cheese Company Balance Sheet December 31, 2020 Cost of goods sold Salary expense Amortization expense Other operating expenses Interest expense Income tax expense Total expenses Net income 2020 2019 $ 21,000 $ 18,000 31,000 35,000 53,000 25,000 $105,000 $78,000 120,000 $ 225,000 $ 4,000 2,000 $6,000 84,000 $ 90,000 $ 42,000 93,000 $ 135,000 $ 225,000 90,000 $ 168,000 $ 6,000 1,000 $7,000 90,000 $ 97,000 Big Cheese Co. Income Statement For the Year Ended December 31, 2020 $ 17,000 54,000 $71,000 $168,000 $ 240,000 1,000 4,000 $110,000 45,000 12,000 23,000 1,000 5,000 Change 3,000 (4,000) 28,000 $27,000 30,000 $57,000 $ (2,000) 1,000 $(1,000) (6,000) $ (7,000) $ 25,000 39,000 $ 64,000 $ 57,000 $245,000 196,000 $ 19.000 Revenues and gains: Sales revenue Interest revenue Gain on sale of plant assets Total revenues Expenses: Big Cheese Co. Income Statement For the Year Ended December 31, 2020 Cost of goods sold Salary expense Amortization expense Other operating expenses Interest expense Income tax expense Total expenses Net income Retained earnings, January 1, 2020 Net income Dividends Retained earnings, December 31, 2020 $ 240,000 1,000 4,000 Big Cheese Co. Statement of Retained Earnings For the Year Ended December 31, 2020 Additional information provided: $110,000 45,000 12,000 23,000 1,000 5,000 $ 54,000 49,000 (10,000) $ 93,000 $245,000 196,000 $49,000 Equipment costing $52,000 was purchased for cash. Equipment with a net asset value of $10,000 was sold for $14,000 Depreciation expense of $12,000 was recorded during the year. The company repaid $40,000 of long-term notes payable. The company borrowed $34,000 on a new note payable There were no share retirements during the year. Required: Refer to the financial statements and information above. Prepare a statement of cash flows in good form assuming that Big Cheese Company uses the indirect method. Big Cheese Company uses the indirect method to prepare its statement of cash flows. Please refer to the following information for the year 2020. Cash Accounts receivable Inventory Total Current Assets Property, Plant & Equipment (net) Total assets Accounts payable Accrued liabilities Total Current Liabilities Long-term notes payable Total liabilities Common shares Retained earnings Total equity Total liabilities and equity Total revenues Revenues and gains: Sales revenue Interest revenue Gain on sale of plant assets Expenses: Big Cheese Company Balance Sheet December 31, 2020 Cost of goods sold Salary expense Amortization expense Other operating expenses Interest expense Income tax expense Total expenses Net income 2020 2019 $ 21,000 $ 18,000 31,000 35,000 53,000 25,000 $105,000 $78,000 120,000 $ 225,000 $ 4,000 2,000 $6,000 84,000 $ 90,000 $ 42,000 93,000 $ 135,000 $ 225,000 90,000 $ 168,000 $ 6,000 1,000 $7,000 90,000 $ 97,000 Big Cheese Co. Income Statement For the Year Ended December 31, 2020 $ 17,000 54,000 $71,000 $168,000 $ 240,000 1,000 4,000 $110,000 45,000 12,000 23,000 1,000 5,000 Change 3,000 (4,000) 28,000 $27,000 30,000 $57,000 $ (2,000) 1,000 $(1,000) (6,000) $ (7,000) $ 25,000 39,000 $ 64,000 $ 57,000 $245,000 196,000 $ 19.000 Revenues and gains: Sales revenue Interest revenue Gain on sale of plant assets Total revenues Expenses: Big Cheese Co. Income Statement For the Year Ended December 31, 2020 Cost of goods sold Salary expense Amortization expense Other operating expenses Interest expense Income tax expense Total expenses Net income Retained earnings, January 1, 2020 Net income Dividends Retained earnings, December 31, 2020 $ 240,000 1,000 4,000 Big Cheese Co. Statement of Retained Earnings For the Year Ended December 31, 2020 Additional information provided: $110,000 45,000 12,000 23,000 1,000 5,000 $ 54,000 49,000 (10,000) $ 93,000 $245,000 196,000 $49,000 Equipment costing $52,000 was purchased for cash. Equipment with a net asset value of $10,000 was sold for $14,000 Depreciation expense of $12,000 was recorded during the year. The company repaid $40,000 of long-term notes payable. The company borrowed $34,000 on a new note payable There were no share retirements during the year. Required: Refer to the financial statements and information above. Prepare a statement of cash flows in good form assuming that Big Cheese Company uses the indirect method.

Answer rating: 100% (QA)

Big Cheese Company Statement of Cash Flows for the Year Ended December 31 2020 Operating Activities Net income 49000 Adjustments to reconcile net income to net cash provided by operating activities De... View the full answer