The comparative statement of financial position for Sheridan Retailers Ltd. follows: SHERIDANRETAILERS LTD. Statement of Financial Position
Question:
The comparative statement of financial position for Sheridan Retailers Ltd. follows:
SHERIDANRETAILERS LTD. | ||||||||
---|---|---|---|---|---|---|---|---|
Assets | 2021 | 2020 | ||||||
Cash | $ | 0 | $ | 21,000 | ||||
Accounts receivable | 72,000 | 47,000 | ||||||
Inventory | 218,000 | 171,000 | ||||||
Furniture | 134,000 | 164,000 | ||||||
Accumulated depreciation | (35,000 | ) | (45,000 | ) | ||||
Total assets | $ | 389,000 | $ | 358,000 | ||||
Liabilities and Shareholders’ Equity | ||||||||
Bank overdraft | $ | 5,000 | $ | 0 | ||||
Accounts payable | 65,000 | 48,000 | ||||||
Bank loan payable (noncurrent) | 90,000 | 105,000 | ||||||
Common shares | 49,000 | 59,000 | ||||||
Retained earnings | 180,000 | 146,000 | ||||||
Total liabilities and shareholders’ equity | $ | 389,000 | $ | 358,000 |
Additional information regarding 2021:
1. | Net income was $39,000. | |
2. | Depreciation expense was $16,000. | |
3. | During the year, the company did not receive any new bank loans. | |
4. | During the year, the company did not purchase furniture but did sell some furniture for $6,000, which resulted in a gain on disposal of $2,000. | |
5. | No common shares were issued during the year but some were repurchased at the cost at which they were originally issued. | |
6. | During the year, the company paid all dividends declared. |
(a)
Prepare a statement of cash flows using the indirect method for 2021. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)
Financial Accounting Tools for Business Decision Making
ISBN: 978-1119368458
7th Canadian edition
Authors: Paul D. Kimmel, Jerry J. Weygandt, Donald E. Kieso, Barbara Trenholm, Wayne Irvine