Brentwood Bay Inc.’s comparative balance sheet at September 30, 2020, and its 2020 income statement are shown below:

Other information for the year ended September 30, 2020:

a. Acquired equipment by issuing long-term note payable, $89,200, and paying $16,000 cash.

b. Paid long-term note payable, $122,800.

c. Received $207,600 cash for issuance of common shares.

d. Paid cash dividends, $217,200.

e. Acquired equipment by issuing short-term note payable, $40,000.

Required

1. Prepare Brentwood Bay Inc.’s cash flow statement for the year ended September 30, 2020, using the direct method to report operating activities.

2. Also prepare a note to the financial statements giving a summary of non-cash investing and financing activities. All current accounts, except short-term note payable, result from operating transactions.

Transcribed Image Text:

BRENTWOOD BAY INC. Balance Sheet September 30, 2020 and 2019 Assets 2020 2019 Current assets Cash $ 194,800 96,400 Accounts receivable 167,600 164,000 Interest receivable 16,400 11,200 Inventory 486,800 467,600 Prepaid expenses 34,400 37,200 Long-term investments 204,400 55,200 Plant and equipment, net 527,600 416,400 Land 188,400 297,200 Total assets $1,820,400 $1,545,200 Liabilities Current liabilities Note payable, short-term 40,000 Accounts payable 247,200 281,200 Income tax payable 47,200 46,400 Accrued liabilities 71,600 116,400 Interest payable Salaries payable 18,000 12,800 6,000 4,400 Long-term note payable 492,000 525,600 Shareholders' Equity Common shares 543,600 336,000 Retained earnings 354,800 222,400 Total liabilities and shareholders' equity $1,820,400 $1,545,200