Question: PLEASE DO ON WORD DOCUMENT. THANK YOU Question 3: (19 points) Quality Kitchen Companys 2021 single-step income statement and comparative balance sheet are provided below:
PLEASE DO ON WORD DOCUMENT. THANK YOU
Question 3: (19 points)
Quality Kitchen Companys 2021 single-step income statement and comparative balance sheet are provided below:
QUALITY KITCHEN COMPANY
Income Statement
Year Ended December 31, 2021
Revenue................................................................................................................... $ 920,000
Expenses
Cost of goods sold......................................................................... $ 493,500
Salaries............................................................................................... 189,000
Other operating expense ................................................................... 73,500
Depreciation expense........................................................................ 25,000
Interest.................................................................................................. 13,000
Income taxes....................................................................................... 18,000 812,000
Profit.......................................................................................................................... $ 108,000
QUALITY KITCHEN COMPANY
Balance Sheet
December 31
2021 2020
Assets
Cash.......................................................................................................... $ 14,000 $ 10,000
Accounts receivable................................................................................... 29,000 24,000
Inventory...................................................................................................... 13,500 17,000
Prepaid expenses......................................................................................... 2,000 2,000
Land............................................................................................................ 250,000 250,000
Building and equipment cost............................................................... 497,000 422,000
Accumulated depreciation.................................................................... (150,000) (125,000)
Total assets..................................................................................... $ 655,500$ 600,000
Liabilities and Shareholders' Equity
Accounts payable.................................................................................... $ 25,900 $ 22,400
Taxes payable............................................................................................... 1,000 3,000
Interest payable............................................................................................. 1,500 2,500
Salaries payable............................................................................................ 8,000 5,000
Long-term debt......................................................................................... 234,000 260,000
Common shares....................................................................................... 120,000 100,000
Retained earnings.................................................................................... 265,100 207,100
Total liabilities and shareholders' equity.................................... $ 655,500$ 600,000
Additional information:
1. No new long-term debt was taken during the year.
2. New equipment was purchased, and none was sold.
3. Common shares were issued for cash.
4. Cash dividends were paid to common shareholders.
5. All operating expenses were paid in the period incurred.
Required: Prepare the cash flow statement for 2021, using the direct method.
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