Sandhill Company had the following information available at the end of 2020. SANDHILL COMPANY COMPARATIVE BALANCE SHEETS
Question:
Sandhill Company had the following information available at the end of 2020.
SANDHILLCOMPANY | ||||||
2020 | 2019 | |||||
Cash | $10,100 | $4,020 | ||||
Accounts receivable | 20,580 | 12,830 | ||||
Short-term investments | 22,020 | 29,750 | ||||
Inventory | 42,390 | 34,710 | ||||
Prepaid rent | 3,020 | 12,030 | ||||
Prepaid insurance | 2,100 | 89 | ||||
Supplies | 1,000 | 74 | ||||
Land | 125,640 | 176,140 | ||||
Buildings | 347,130 | 347,130 | ||||
Accumulated depreciation—buildings | (104,250 | ) | (87,940 | ) | ||
Equipment | 530,080 | 398,810 | ||||
Accumulated depreciation—equipment | (130,600 | ) | (111,650 | ) | ||
Patents | 44,570 | 49,920 | ||||
Total assets | $913,780 | $865,913 | ||||
Accounts payable | $22,110 | $32,240 | ||||
Income taxes payable | 5,010 | 4,010 | ||||
Salaries and wages payable | 5,000 | 2,990 | ||||
Short-term notes payable | 10,010 | 10,010 | ||||
Long-term notes payable | 59,650 | 70,450 | ||||
Bonds payable | 402,050 | 402,050 | ||||
Premium on bonds payable | 19,870 | 21,533 | ||||
Common stock | 241,660 | 220,690 | ||||
Paid-in capital in excess of par—common stock | 24,940 | 17,540 | ||||
Retained earnings | 123,480 | 84,400 | ||||
Total liabilities and stockholders’ equity | $913,780 | $865,913 |
SANDHILL COMPANY | ||||||
Sales revenue | $1,161,810 | |||||
Cost of goods sold | 753,770 | |||||
408,040 | ||||||
Gross margin | ||||||
Operating expenses | ||||||
Selling expenses | $79,370 | |||||
Administrative expenses | 150,640 | |||||
Depreciation/Amortization expense | 40,610 | |||||
Total operating expenses | 270,620 | |||||
Income from operations | 137,420 | |||||
Other revenues/expenses | ||||||
Gain on sale of land | 7,980 | |||||
Gain on sale of short-term investment | 4,040 | |||||
Dividend revenue | 2,410 | |||||
Interest expense | (51,610 | ) | (37,180 | ) | ||
Income before taxes | 100,240 | |||||
Income tax expense | 39,060 | |||||
Net income | 61,180 | |||||
Dividends to common stockholders | (22,100 | ) | ||||
To retained earnings | $39,080 |
Prepare a statement of cash flows for Sandhill Company using the direct method accompanied by a reconciliation schedule. Assume the short-term investments are debt securities, classified as available-for-sale.
Intermediate Accounting principles and analysis
ISBN: 978-0471737933
2nd Edition
Authors: Terry d. Warfield, jerry j. weygandt, Donald e. kieso