Michaels Ltd. had available at the end of 2019 the following information. Instructions Prepare a statement of
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Instructions
Prepare a statement of cash flows for Michaels Ltd. using the direct method. Assume the short-term investments are non-trading. Bond premium amortized was £5,550.
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Michaels Ltd. COMPARATIVE STATEMENTS OF FINANCIAL POSITION AS OF DECEMBER 31, 2019 AND 2018 2019 2018 Land £125,000 £175,000 Buildings 350,000 350,000 Accumulated depreciation-buildings (105,000) (87,500) Equipment 525,000 400,000 Accumulated depreciation-equipment (130,000) (112,000) Patents 45,000 50,000 Inventory 42,000 35,000 Prepaid rent 3,000 12,000 Prepaid insurance 2,100 900 Supplies 1,000 750 Short-term equity investments 22,000 30,000 20,500 Accounts receivable 12,950 Cash 10,000 4,000 Total assets £910,600 £871,100 Share capital-ordinary £240,000 £220,000 Share premium-ordinary 25,000 17,500 Retained earnings 123,297 88,747 Long-term notes payable 60,000 70,000 Bonds payable 420,303 425,853 Accounts payable 22,000 32,000 Income taxes payable 5,000 4,000 Salaries and wages payable 5,000 3,000 Short-term notes payable 10,000 10,000 Total equity and liabilities £910,600 £871,100 MICHAELS Ltd. INCOME STATEMENT FOR THE YEAR ENDED DECEMBER 31, 2019 Sales revenue £1,160,000 Cost of goods sold (748,000) Gross margin 412,000 Operating expenses Selling expenses £€79,200 Administrative expenses 156,700 Depreciation/Amortization expense 40,500 Total operating expenses (276,400) Income from operations 135,600 Other income and expense Gain on sale of land 8,000 Gain on sale of short-term investment 4,000 Dividend revenue 2,400 Interest expense (51,750) (37,350) Income before taxes 98,250 Income tax expense (39,400) Net income 58,850 Dividends to ordinary shareholders (24,300) To retained earnings 34,550
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Related Book For
Intermediate Accounting IFRS
ISBN: 978-1119372936
3rd edition
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield
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