The following are the statement of financial position, the statement of comprehensive income and excerpts from...

  

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The following are the statement of financial position, the statement of comprehensive income and excerpts from the notes to the financial statements for Pivotal Inc. (Pivotal), a public company, for the years ended December 31, 2018 and 2019: Pivotal Inc. Statement of financial position As at December 31 2019 2018 Assets $ 182,000 620,000 (177,000) 516,000 35,000 2,445,800 (1,213,100) (1,150,200) $2.930.900 $2.471.600 Cash $ 256,000 Accounts receivable 728,000 (192,000) 658,000 42,000 2,652,000 Allowance for doubtful accounts Inventory Prepaid expenses Property, plant and equipment Accumulated depreciation Total assets Liabilities and shareholders' equity Liabilities $ 580,000 48,400 20,500 $ 627,000 104,000 96,000 Accounts payable Wages payable Interest payable Income taxes payable Current portion of long-term debt Dividends payable Bonds payable 22,000 190,000 58,000 62,000 88,000 42,000 1,180,000 2,128,900 950,000 1,939,000 Shareholders' equity 380,000 422,000 802,000 Total liabilities and shareholders' equity $2.930.900 Common shares 280,000 Retained earnings Total shareholders' equity 252,600 532,600 $2.471.600 Pivotal Inc. Statement of comprehensive income For the year ended December 31, 2019 $4,982,200 (3,884,150) 1,098,050 (120,900) (520,000) (108,000) (91,750) (15,000) 16,000 $ 258.400 Sales Cost of goods sold Gross profit Depreciation expense Operating expenses Interest expense Income tax expense Bad debt expense Gain on disposal equipment Net income The following are excerpts from the notes to the financial statements for Pivotal for the years ended December 31, 2019 and 2018: Property, plant and equipment In 2019, Pivotal disposed of a piece of equipment that had a net book value of $120,000 and expanded its warehouse (included in property, plant and equipment) at a cost of $230,000. Long-term debt Pivotal issued $230,000 of long-term debt on July 1, 2019, at an interest rate of 5% with a 10-year term, to finance its warehouse expansion. Pivotal issued $128,000 of long-term debt on September 1, 2019, at an interest rate of 6.5% with a 15-year term, for general operating purposes. Required: Prepare the statement of cash flows of Pivotal for the year ended December 31, 2019, using the indirect method. (14 marks) The following are the statement of financial position, the statement of comprehensive income and excerpts from the notes to the financial statements for Pivotal Inc. (Pivotal), a public company, for the years ended December 31, 2018 and 2019: Pivotal Inc. Statement of financial position As at December 31 2019 2018 Assets $ 182,000 620,000 (177,000) 516,000 35,000 2,445,800 (1,213,100) (1,150,200) $2.930.900 $2.471.600 Cash $ 256,000 Accounts receivable 728,000 (192,000) 658,000 42,000 2,652,000 Allowance for doubtful accounts Inventory Prepaid expenses Property, plant and equipment Accumulated depreciation Total assets Liabilities and shareholders' equity Liabilities $ 580,000 48,400 20,500 $ 627,000 104,000 96,000 Accounts payable Wages payable Interest payable Income taxes payable Current portion of long-term debt Dividends payable Bonds payable 22,000 190,000 58,000 62,000 88,000 42,000 1,180,000 2,128,900 950,000 1,939,000 Shareholders' equity 380,000 422,000 802,000 Total liabilities and shareholders' equity $2.930.900 Common shares 280,000 Retained earnings Total shareholders' equity 252,600 532,600 $2.471.600 Pivotal Inc. Statement of comprehensive income For the year ended December 31, 2019 $4,982,200 (3,884,150) 1,098,050 (120,900) (520,000) (108,000) (91,750) (15,000) 16,000 $ 258.400 Sales Cost of goods sold Gross profit Depreciation expense Operating expenses Interest expense Income tax expense Bad debt expense Gain on disposal equipment Net income The following are excerpts from the notes to the financial statements for Pivotal for the years ended December 31, 2019 and 2018: Property, plant and equipment In 2019, Pivotal disposed of a piece of equipment that had a net book value of $120,000 and expanded its warehouse (included in property, plant and equipment) at a cost of $230,000. Long-term debt Pivotal issued $230,000 of long-term debt on July 1, 2019, at an interest rate of 5% with a 10-year term, to finance its warehouse expansion. Pivotal issued $128,000 of long-term debt on September 1, 2019, at an interest rate of 6.5% with a 15-year term, for general operating purposes. Required: Prepare the statement of cash flows of Pivotal for the year ended December 31, 2019, using the indirect method. (14 marks)

Answer rating: 100% (QA)

11502001209001213100 58000 Depreciation on Sold Equipment 12000058000 178000 in equipment costs sold ... View the full answer