The CFO of the Company has prepared a DRAFT of the Company's statement of cash flows...
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The CFO of the Company has prepared a DRAFT of the Company's statement of cash flows for the year ended December 31, 2022. As previously mentioned, the Company's CFO was a former manager with your firm and is qualified to prepare this statement. The DRAFT cash flow statement and the 2021 trial balance are set both below along with the Company's adjusted trial balance for the prior year. Joey has asked you to review the DRAFT statement, including agreeing the numbers to the current year and prior year trial balances. RB Johnson Electric Company Trial Balance 12.31.21 Debit Credit Cash 250,000 Accounts receivable 1,250,000 Allowance for doubtful accounts 10,000 Inventory 30,000 Contract assets 675,000 Contract liabilities 875,000 Property and equipment 1,750,000 Accumulated depreciation 1,325,000 Accounts payable 1,390,000 Line of credit bank 0 Common stock 50,000 Additional paid in capital Retained earnings Revenues Cost of revenues Depreciation Selling, general, and administrative expenses 100,000 780,000 35,750,000 33,825,000 175,000 2,325,000 40,280,000 40,280,000 Net income 1,425,000 Increase in accounts receivable (250,000) Decrease in inventory 10,000 Increase in contract assets (25,000) Decrease in contract liabilities (300,000) Decrease in accounts payable (1,335,000) Increase in accrued legal settlement 100,000 Cash used in operations (375,000) Financing activities Increase in line of credit 75,000 Investing activities Depreciation 175,000 Decrease in cash (125,000) Cash beginning of year 250,000 Cash end of year 125,000 Required 1. By reference to the Company's 2021 and 2022 trial balances re-calculate the amounts appearing in the in the 2022 statement of cash flows, prepared by the Company's CFO, and note any differences. 2. Based on your review of the Company's 2022 statement of cash flows, including what you did in item 1 above, describe any additional issues that you may have with the DRAFT statement. 3. If any items are noted in items 1 or 2 above, describe that issue in the context of the appropriate financial statement assertion. The CFO of the Company has prepared a DRAFT of the Company's statement of cash flows for the year ended December 31, 2022. As previously mentioned, the Company's CFO was a former manager with your firm and is qualified to prepare this statement. The DRAFT cash flow statement and the 2021 trial balance are set both below along with the Company's adjusted trial balance for the prior year. Joey has asked you to review the DRAFT statement, including agreeing the numbers to the current year and prior year trial balances. RB Johnson Electric Company Trial Balance 12.31.21 Debit Credit Cash 250,000 Accounts receivable 1,250,000 Allowance for doubtful accounts 10,000 Inventory 30,000 Contract assets 675,000 Contract liabilities 875,000 Property and equipment 1,750,000 Accumulated depreciation 1,325,000 Accounts payable 1,390,000 Line of credit bank 0 Common stock 50,000 Additional paid in capital Retained earnings Revenues Cost of revenues Depreciation Selling, general, and administrative expenses 100,000 780,000 35,750,000 33,825,000 175,000 2,325,000 40,280,000 40,280,000 Net income 1,425,000 Increase in accounts receivable (250,000) Decrease in inventory 10,000 Increase in contract assets (25,000) Decrease in contract liabilities (300,000) Decrease in accounts payable (1,335,000) Increase in accrued legal settlement 100,000 Cash used in operations (375,000) Financing activities Increase in line of credit 75,000 Investing activities Depreciation 175,000 Decrease in cash (125,000) Cash beginning of year 250,000 Cash end of year 125,000 Required 1. By reference to the Company's 2021 and 2022 trial balances re-calculate the amounts appearing in the in the 2022 statement of cash flows, prepared by the Company's CFO, and note any differences. 2. Based on your review of the Company's 2022 statement of cash flows, including what you did in item 1 above, describe any additional issues that you may have with the DRAFT statement. 3. If any items are noted in items 1 or 2 above, describe that issue in the context of the appropriate financial statement assertion.
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Answer rating: 100% (QA)
To recalculate the amounts appearing in the 2022 statement of cash flows and note any differences we need to review the trial balances for both 2021 and 2022 RB Johnson Electric Company Trial Balance ... View the full answer
Related Book For
Intermediate Accounting
ISBN: 978-0176509736
10th Canadian Edition, Volume 1
Authors: Donald Kieso, Jerry Weygandt, Terry Warfield, Nicola Young,
Posted Date:
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