Exercise 23-11 

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Condensed financial data of Pat Metheny Company for 2020 and 2019 are presented below.

PAT METHENY COMPANY

COMPARATIVE BALANCE SHEET

AS OF DECEMBER 31, 2020 AND 2019

2020

2019

Cash

$1,800

$1,150

Receivables

1,750

1,300

Inventory

1,600

1,900

Plant assets

1,900

1,700

Accumulated depreciation

(1,200

)(1,170

)Long-term investments (held-to-maturity)

1,300

1,420

$7,150

$6,300

Accounts payable

$1,200

$900

Accrued liabilities

200

250

Bonds payable

1,400

1,550

Common stock

1,900

1,700

Retained earnings

2,450

1,900

$7,150

$6,300

PAT METHENY COMPANY

INCOME STATEMENT

FOR THE YEAR ENDED DECEMBER 31, 2020

Sales revenue

$6,900

Cost of goods sold

4,700

Gross margin

2,200

Selling and administrative expenses

930

Income from operations

1,270

Other revenues and gains

Gain on sale of investments

80

Income before tax

1,350

Income tax expense

540

Net income

810Cash dividends

260

Income retained in business

$550

Additional information:

During the year, $70of common stock was issued in exchange for plant assets. No plant assets were sold in 2020.

Prepare a statement of cash flows using the indirect method.(Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)