Atlantic Corporation€™s comparative balance sheet as of December 31, 2019 and 2018, and 2019 condensed income statement appear below.

INSTRUCTIONS
Prepare a statement of cash flows for 2019. Additional information for the year follows:
a. Depreciation totaling $9,000 is included in expenses.
b. Sold land for $35,000 in cash; the land, which is included in plant and equipment, had a cost of $35,000.
c. Acquired a building with a fair market value of $100,000 by issuing common stock.
d. Purchased equipment for $25,000 in cash.
e. Paid dividends of $50,000.

Analyze: If the company had purchased equipment on credit instead of using cash, what would the cash balance have been at year-end?

Transcribed Image Text:

Atlantic Corporatlon Comparative Balance Sheet December 31, 2019 and 2018 Assets 2018 2019 Cash 109200 6 5 650 5 0 0 00 90000 70000 64000 Accounts Receivable (Net) Merchandise Inventory Prepaid Advertising Property, Plant, and Equipment 8000 29 0 000 19000 50 3850 10000 200000 Less Accumulated Depreciation (10000 4 24000 Total Assets Liabilities and Stockholders' Equity Liabilities Accounts Payable 6 4 500 95000 25000 Income Taxes Payable 6 000 25000 95500 Notes Payable-2021 40000 Total Liabilities 160000 Stockholders' Equity Common Stock ($1 par) Retained Earnings 20 0 000 208 350 4 08 350 5 0 3 850 100000 164000 2 6400 0 Total Stockholders' Equity Total Liabilities and Stockholders' Equity 4 24000 Atlantic Corporatlon Condensed Income Statement Year Ended December 31, 2019 Revenues Costs and Expenses 775000 Cost of Goods Sold Expenses Net Income 385000 2956 50 94350