Instructions:

Prepare a cash flow statement for the year ended December 31, 2020, using the indirect method.

Condensed financial data of ABC INC. appears below. ABC INC. follows ASPE.

ABC INC.

Comparative Balance Sheet

December 31, 2020

Assets 2020 2019

Cash $ 89,000 $ 34,200

Accounts receivable 86,100 29,000

Inventories 107,350 99,450

Prepaid expenses 15,250 13,000

Investments (Long-Term) 105,000 91,000

Equipment 266,900 238,000

Accumulated depreciation (50,000) (51,000)

$619,600 $453,650

Liabilities and Shareholders Equity

Accounts payable $ 87,300 $ 62,350

Accrued liabilities 12,500 14,000

Bonds payable 80,000 105,000

Common shares 210,000 170,000

Retained earnings 229,800 102,300

$619,600 $453,650

ABC INC.

Income Statement Data

For the Year Ended December 31, 2020

Sales $348,780

Less:

Cost of goods sold $123,060

Operating expenses 15,410

(excluding depreciation)

Depreciation expense 43,100

Income taxes 9,280

Interest expense 5,730

Loss on sale of equipment 5,500 202,080

Profit $146,700

Additional information:

1. New equipment costing $81,000 was purchased for cash during the year.

2. Old equipment with an original cost of $52,100 was sold for $2,500 cash.

3. Bonds matured and were paid off in cash.

4. A cash dividend of $19,200 was declared and paid during the year.

Instructions:

Prepare a cash flow statement for the year ended December 31, 2020, using the indirect method. (please show all the steps)

Instructions: Prepare a cash flow statement for the year ended December 31, 2020 using the indirect method. Condensed financial data of ABC INC. appears below. ABC INC. follows ASPE. ABC INC. Comparative Balance Sheet December 31, 2020 Assets 2020 2019 Cash Accounts receivable Inventories Prepaid expenses Investments (Long-Term) Equipment Accumulated depreciation $ 89,000 86,100 107,350 15,250 105,000 266,900 (50,000) $619,600 $ 34,200 29,000 99,450 13,000 91,000 238,000 (51.000) $453,650 Liabilities and Shareholders' Equity Accounts payable Accrued liabilities Bonds payable Common shares Retained earnings S 87,300 12,500 80,000 210.000 229,800 $619,600 $ 62,350 14,000 105,000 170,000 102,300 $453,650 ABC INC. Income Statement Data For the Year Ended December 31, 2020 $348.780 $123,060 15,410 Sales Less: Cost of goods sold Operating expenses (excluding depreciation) Depreciation expense Income taxes Interest expense Loss on sale of equipment Profit 43,100 9,280 5,730 5.500 202.080 $146.700 Additional information: 1. New equipment costing $81,000 was purchased for cash during the year. 2. Old equipment with an original cost of $52, 100 was sold for $2.500 cash. 3. Bonds matured and were paid off in cash. 4. A cash dividend of S19,200 was declared and paid during the year