Below is a list of the general ledger account totals from the trial balance at the end
Question:
Below is a list of the general ledger account totals from the trial balance at the end of 2020 for the business.
Name of Account Dr Cr
Cash ?
Inventory 15,000
Accounts Receivable ?
Prepaid Lease 0
Property Plant & Equipment ?
Accumulated Depreciation ?
Suppliers Accounts Payable 28,000
Taxes Payable 0
Interest Only Bank Loan 55,000
Contributed Capital 10,000
Retained Earnings ?
Credit Sales 175,000
Cash Sales 30,000
Cost of Goods Sold 88,000
Wages Expense 29,000
Lease Expense 8,000
Utilities Expenses 5,000
Interest on Bank Loan 3,000
Dividends Paid 50,000
Except for the cost of goods sold and new taxes, assume that all expenses are paid for in cash. The business had new equipment purchases during 2020 of $5,000 and depreciation on all property, plant & equipment is calculated using the reducing balance method with an annual depreciation rate of 35%.
Note
the business pays a flat tax rate of 28%
total cash receipts from accounts receivable were $175,000
a. Based on all of the above information, construct an updated Statement of Financial Position for the business at the end of 2020. Note the Business’s final cash position will be a balancing item assuming all of the other information has been processed correctly.
b. Based on all of the above information, construct a Statement of Cashflows for 2020 and check that the balance sheet cash position is correct.
