Comparative balance sheet accounts of Oriole Inc. are presented below. ORIOLE INC. COMPARATIVE BALANCE SHEET ACCOUNTS AS
Question:
Comparative balance sheet accounts of Oriole Inc. are presented below.
ORIOLE INC. | ||||
December 31 | ||||
Debit Accounts | 2020 | 2019 | ||
Cash | $42,200 | $33,700 | ||
Accounts Receivable | 70,800 | 60,200 | ||
Inventory | 30,000 | 24,300 | ||
Equity investments | 22,400 | 38,300 | ||
Machinery | 30,100 | 18,800 | ||
Buildings | 67,000 | 56,100 | ||
Land | 7,500 | 7,500 | ||
$270,000 | $238,900 | |||
Credit Accounts | ||||
Allowance for Doubtful Accounts | $2,200 | $1,500 | ||
Accumulated Depreciation—Machinery | 5,700 | 2,300 | ||
Accumulated Depreciation—Buildings | 13,600 | 9,000 | ||
Accounts Payable | 35,100 | 24,700 | ||
Accrued Payables | 3,300 | 2,600 | ||
Long-Term Notes Payable | 21,200 | 31,000 | ||
Common Stock, no-par | 150,000 | 125,000 | ||
Retained Earnings | 38,900 | 42,800 | ||
$270,000 | $238,900 |
Additional data (ignoring taxes):
1. | Net income for the year was $42,400. | |
2. | Cash dividends declared and paid during the year were $21,300. | |
3. | A 20% stock dividend was declared during the year. $25,000 of retained earnings was capitalized. | |
4. | Equity investments (level of ownership is less than 20%) that cost $24,800 were sold during the year for $28,500. No unrealized gains and losses were recorded on these investments in 2020. | |
5. | Machinery that cost $3,800, on which $750 of depreciation had accumulated, was sold for $2,250. |
Oriole’s 2020 income statement follows (ignoring taxes).
Sales revenue | $541,000 | ||||
Less: Cost of goods sold | 381,800 | ||||
Gross margin | 159,200 | ||||
Less: Operating expenses (includes $8,750 depreciation and $5,735 bad debts) | 119,700 | ||||
Income from operations | 39,500 | ||||
Other: Gain on sale of investments | $3,700 | ||||
Loss on sale of machinery | (800 | ) | 2,900 | ||
Net income | $42,400 |
(a) Compute net cash flow from operating activities using the direct method. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)
Net cash flow from operating activities | $ |
(b) Prepare a statement of cash flows using the indirect method. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)
ORIOLE INC. |
| ||
$ | ||
Adjustments to reconcile net income to | ||
$ | ||
$ |
Intermediate Accounting principles and analysis
ISBN: 978-0471737933
2nd Edition
Authors: Terry d. Warfield, jerry j. weygandt, Donald e. kieso