Chapter 13

1. The following financial statement data is available for the Scottsdale Company for Dec. 31, 2019. (30 pts) Comparative Balance Sheet Data 2019 2018 Cash $ 39,835 $ 4,000 Accounts Receivable 17,500 12,950 Dividends Receivable 1,000 0 Inventory 42,000 35,000 Prepaid rent 3,000 12,000 Prepaid insurance 2,100 900 Office supplies 1,000 750 Long-term investments 20,000 30,000 Land 125,000 175,000 Building 350,000 350,000 Accumulated depreciation, Building (105,000) (87,500) Equipment 525,000 400,000 Accumulated depreciation, Equipment (130,000) (112,000) Patent 45,000 50,000 Total assets $ 936,435 $ 871,100 Accounts payable $ 26,000 $ 30,000 Income taxes payable 5,000 4,000 Wages payable 5,000 3,000 Short-term notes payable 10,000 10,000 Dividends payable 1,500 0 Unearned Income 500 2,000 Accrued Liabilities 5,303 10,853 Long-term notes payable 60,000 70,000 Bonds payable 415,000 415,000 Common stock ($10 par) 290,000 220,000 Paid-in capital in excess of par 46,410 17,500 Retained earnings 106,722 88,747 Treasury Stock (35,000) 0 Total liabilities and equity $ 936,435 $ 871,100 Income Statement Sales revenue $1,160,000 Cost of goods sold ( 748,000) Gross profit 412,000 Operating expenses ( 276,400) Income from operations 135,600 Other revenues/expense Gain on sale of land 8,000 Gain on sale of long-term investment 4,000 Dividend revenue 2,400 Interest expense (51,750) ( 37,350) Income before taxes 98,250 Income tax expense ( 39,400) Net income 58,850 Instructions:
   • Create a Comparative Balance Sheet where you compute the dollar change in every account on the Balance Sheet.
   • For the Operating Section (Indirect Method):
     • Add or subtract accordingly all items you labeled as an Operating activity from the Balance Sheet
     • Adjust out anything included in Net Income that belongs in the Investing or Financing section
     • Add back Depreciation and/or Amortization Expense
     • Start with Net Income