The following financial information is obtained regarding Stallion Company: 12/31/20 12/31/19 Current Assets: Cash 210,000 46,000 Accounts

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Question:

The following financial information is obtained regarding Stallion Company:

12/31/20 12/31/19

Current Assets:

Cash 210,000 46,000

Accounts Receivable (net) 160,000 90.000

Merchandise Inventory 120,000 150,000

Prepaid Expenses 7,000 2,000

Supplies 3,000 4,000

Non-Current Assets:

Land 100,000 -0-

Plant Assets 200,000 200,000

Accumulated Depreciation (60,000) (40,000)

Total Assets 740,000 452,000

Current Liabilities:

Accounts Payable 15,000 33,000

Accrued Liabilities 35,000 9,000

Non-current Liabilities:

Notes Payable 100,000 20,000

Total Liabilities: 150,000 62,000

Common Stock ($1 Par Value) 210,000 140,000

Common Stock-APIC 50,000 10,000

Retained Earnings 330,000 240,000

Total Stockholders’ Equity 590,000 390,000

Additional Data:

A) 2020 Net Income was $160,000

B) Land was acquired by taking out a Notes Payable for $90,000 and paying Cash for the balance.

C) All Common Stock was issued for Cash.

REQUIRED:

Prepare the Statement of Cash Flow for Stallion Company under the Indirect Method.

HINT: Don’t be afraid to be an Accounting Detective and draw T-accounts on scrap paper. That will help you with Notes Payable as well as with Depreciation Expense and Dividends which are not given here but can be easily calculated if you are a good Accounting Detective!