QS 16-5 Calculating cash from operating activities (indirect method) 105 Using the indirect method, calculate the cash inflow or outflow from operating activities, using the following information: Denman Inc. Comparative Balance Sheet Information December 31 2020 2019 $ 10 $ 25 28 36 49 22 5 4 4 Cash.... Accounts receivable (net). Merchandise inventory.... Prepaid rent..... Office supplies.. Property, plant, and equipment (net)*. Accounts payable......... Unearned revenue. Common shares.. Retained earnings** 3 120 145 18 20 7 2 90 90 100 124 "No property, plant, and equipment items were purchased or sold during 2020. **No dividends were declared or paid during 2020. QUESTION 1 ANSWER SHEET QUESTION 2 ANSWER INDIRECT ANSWER DIRECT Fast Cars Inc. was authorized to issue 50,000 $1.50 preferred shares and 300,000 common shares. During 2020, its first year of operations the following selected transactions occurred: Jan. 1 5,500 of the preferred shares were issued at $13.00 per share: cash. Feb. $15.000 of the common shares were issued for a total of $131.000: cash. 20 3,000 of the common shares were given to the organizers of the corporation regarding their efforts. The shares were valued at a total of $29,300 May 15 12.500 preferred shares and 22.500 common shares were issued at $13.10 and $9.50 respectively: cash. Dec 31 The Income Summary account was closed; it showed a debit balance of $334,000. December 31 is Fast Car's year-end. Mar. Required a. Journalize the above transactions b. Prepare the equity section of Fast Car's balance sheet at December 31, 2020