The following are Sullivan Corp.?s comparative balance sheet accounts at December 31, 2020 and 2019, with a
Question:
The following are Sullivan Corp.?s comparative balance sheet accounts at December 31, 2020 and 2019, with a column showing the increase (decrease) from 2019 to 2020.
Additional information:
1. On December 31, 2019, Sullivan acquired 25% of Myers Co.?s common stock for $275,000. On that date, the carrying value of Myers?s assets and liabilities, which approximated their fair values, was $1,100,000. Myers reported income of $140,000 for the year ended December 31, 2020. No dividend was paid on Myers?s common stock during the year.
2. During 2020, Sullivan loaned $300,000 to TLC Co., an unrelated company. TLC made the first semiannual principal repayment of $50,000, plus interest at 10%, on December 31, 2020.
3. On January 2, 2020, Sullivan sold equipment costing $60,000, with a carrying amount of $38,000, for $40,000 cash.
4. On December 31, 2020, Sullivan entered into a capital lease for an office building. The present value of the annual rental payments is $400,000, which equals the fair value of the building. Sullivan made the first rental payment of $60,000 when due on January 2, 2021.
5. Net income for 2020 was $370,000.
6. Sullivan declared and paid the following cash dividends for 2020 and 2019.
Instructions
Prepare a statement of cash flows for Sullivan Corp. for the year ended December 31, 2020, using the indirect method.
Step by Step Answer:
Intermediate Accounting
ISBN: 978-1119503668
17th edition
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfiel