Rankweil Industries Balance Sheet As at December 31 2021 2020 Current assets Cash and cash equivalents...

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Rankweil Industries Balance Sheet As at December 31 2021 2020 Current assets Cash and cash equivalents 69,000 62,700 Short-term marketable securities 286,000 314,000 Accounts receivable 87,000 79,500 Inventory 738,000 656,000 Prepaid expenses 32,800 27,700 Total current assets Fixed assets Land 1,212,800 1,139,900 650,000 650,000 Buildings 3,100,000 3,100,000 Plant & equipment 2,685,000 2,374,000 Sub-total 6,435,000 6,124,000 Less: accumulated depreciation (1,002,000) (920,000) Total fixed assets 5,433,000 5,204,000 Total assets 6,645,800 6,343,900 Current liabilities Accounts payable 610,000 580,000 Operating line of credit 129,000 115,000 Current portion of long-term debt 10,000 10,000 Total current liabilities 749,000 705,000 Long-term liabilities Bond payable 2,910,000 2,945,000 Shareholders' equity Preferred shares 50,000 50,000 Common shares 250,000 220,000 Retained earnings 2,686,800 2,423,900 Total shareholders' equity 2,986,800 2,693,900 Total liabilities and shareholders' equity 6,645,800 6,343,900 Other information 15% of Rankweil Industries' sales are on credit at terms net 30. All inventory purchases are on credit at terms net 60. The market value of Rankweil Industries' common share is $19.80 and it has 140,000 common shares and 60,000 preferred shares outstanding. The preferred shares pay a $0.10 annual dividend. The tax rate is 25.0%. Required: 1. Prepare an indirect cash flow statement for DEF Company. Net sales Rankweil Industries Income Statement For the year ending December 31 Cost of sales 2021 2020 5,100,000 4,800,000 2,670,000 2,520,000 Gross profit 2,430,000 2,280,000 Operating expenses Management salaries 920,000 860,000 Rent 175,000 170,000 Depreciation 120,000 103,000 Wages and benefits 360,000 348,000 Telephone 9,600 8,200 Repairs and maintenance 38,600 41,700 Miscellaneous 15,600 15,900 Total operating expenses 1,638,800 1,546,800 Earnings before interest and taxes 791,200 733,200 Interest expense 265,000 233,000 Earnings before taxes 526,200 500,200 Income taxes 131,550 125,050 Net income 394,650 375,150 Rankweil Industries Balance Sheet As at December 31 2021 2020 Current assets Cash and cash equivalents 69,000 62,700 Short-term marketable securities 286,000 314,000 Accounts receivable 87,000 79,500 Inventory 738,000 656,000 Prepaid expenses 32,800 27,700 Total current assets Fixed assets Land 1,212,800 1,139,900 650,000 650,000 Buildings 3,100,000 3,100,000 Plant & equipment 2,685,000 2,374,000 Sub-total 6,435,000 6,124,000 Less: accumulated depreciation (1,002,000) (920,000) Total fixed assets 5,433,000 5,204,000 Total assets 6,645,800 6,343,900 Current liabilities Accounts payable 610,000 580,000 Operating line of credit 129,000 115,000 Current portion of long-term debt 10,000 10,000 Total current liabilities 749,000 705,000 Long-term liabilities Bond payable 2,910,000 2,945,000 Shareholders' equity Preferred shares 50,000 50,000 Common shares 250,000 220,000 Retained earnings 2,686,800 2,423,900 Total shareholders' equity 2,986,800 2,693,900 Total liabilities and shareholders' equity 6,645,800 6,343,900 Other information 15% of Rankweil Industries' sales are on credit at terms net 30. All inventory purchases are on credit at terms net 60. The market value of Rankweil Industries' common share is $19.80 and it has 140,000 common shares and 60,000 preferred shares outstanding. The preferred shares pay a $0.10 annual dividend. The tax rate is 25.0%. Required: 1. Prepare an indirect cash flow statement for DEF Company. Net sales Rankweil Industries Income Statement For the year ending December 31 Cost of sales 2021 2020 5,100,000 4,800,000 2,670,000 2,520,000 Gross profit 2,430,000 2,280,000 Operating expenses Management salaries 920,000 860,000 Rent 175,000 170,000 Depreciation 120,000 103,000 Wages and benefits 360,000 348,000 Telephone 9,600 8,200 Repairs and maintenance 38,600 41,700 Miscellaneous 15,600 15,900 Total operating expenses 1,638,800 1,546,800 Earnings before interest and taxes 791,200 733,200 Interest expense 265,000 233,000 Earnings before taxes 526,200 500,200 Income taxes 131,550 125,050 Net income 394,650 375,150