David Ski Company had the following statements prepared as of December 31, 2020:

Prepare a statement of cash flows using the indirect method.

David Ski Company
Comparative Balance Sheet
As of December 31
	2020	2019
Cash	2,500	4,000
Account receivable	103,000	97,000
Short-term investment (Available-for-sale)	96,000	121,000
Inventories	91,000	54,000
Prepaid insurance	4,000	6,000
Ski equipment	89,000	43,000
Accumulated depr.-equipment	(23,500)	(18,000)
Trademarks	79,000	83,000
Total asets	441,000	390,000
Account payable	92,200	75,000
income taxes payable	21,800	15,700
Wages payable	4,000	9,000
Short-term loans payable to bank	23,500	0
Long-term loans payable	75,000	125,000
Common stock, $1 par	100,000	100,000
Additional paid-in capital	20,000	20,000
Retained earnings	104,500	45,300
Total liabilities&equity	441,000	390,000
David Ski Company
Income Statement
For the Year Ending December 31, 2020
Sales		540,200
Cost of goods sold		302,000
gross margin		238,200
Operating expenses		94,000
operating income		144,200
Interest expense	20,500
Loss on sale of equipment	4,000	24,500
Income before income tax		119,700
Income tax expense		40,500
Net income		79,200

 Additional information:

1. Depreciation expenses and amortization expenses are included in operating expenses.
2. Equipment that had a cost of $25,000 and was 20% depreciated was sold during 2020.
3. Dividends in the amount of $20,000 were declared and paid during 2020.

Answer rating: 100% (QA)

A cash flow statement is a financial report that shows how muc... View the full answer