Use the Western Environmental Inc. information given below to prepare statement of cash flows for the year ended June 30, 2020, using indirect method.

A. A note is retired at carrying value

B. The only changes affecting retained earnings during 2020 are profit and cash dividends paid

C. New equipment is acquired during 2020 for $68,490.

D. The profit on sale of equipment costing $56,490 during 2020 is $1,800.

E. Prepaid expenses and wages expense affect other expenses on the income statement.

F. All sales and purchases of merchandise were on credit.

 

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Western Environmental Inc. Western Environmental Inc. Income Statement Comparative Balance Sheet Information For Year Ended June 30, 2020 June 30 Sales. $792,000 2019 2020 Cost of goods sold.. 480,000 $312,000 $ 92,160 $ 47,000 102,000 Cash. Gross profit. Accounts receivable (net). 75,600 Operating expenses: Depreciation expense. Other expenses. Total operating expenses. Inventory. Prepaid expenses. Equipment. Accumulated depreciation. Accounts payable. 80,220 116,220 $70,380 6,540 6,300 80,460 162,000 150,000 150,840 34,800 18,000 Profit from operations. $161,160 32,400 39,600 Gain on sale of equipment. 3,600 Wages payable.. 9,600 20,400 Profit before taxes. $164,760 Income taxes payable. Notes payable (long-term). Common shares. Retained earnings. 2,940 4,380 Income taxes. 61,160 $103,600 54,000 90,000 Profit 282,000 222,000 27,180 740 Western Environmental Inc. Western Environmental Inc. Income Statement Comparative Balance Sheet Information For Year Ended June 30, 2020 June 30 Sales. $792,000 2019 2020 Cost of goods sold.. 480,000 $312,000 $ 92,160 $ 47,000 102,000 Cash. Gross profit. Accounts receivable (net). 75,600 Operating expenses: Depreciation expense. Other expenses. Total operating expenses. Inventory. Prepaid expenses. Equipment. Accumulated depreciation. Accounts payable. 80,220 116,220 $70,380 6,540 6,300 80,460 162,000 150,000 150,840 34,800 18,000 Profit from operations. $161,160 32,400 39,600 Gain on sale of equipment. 3,600 Wages payable.. 9,600 20,400 Profit before taxes. $164,760 Income taxes payable. Notes payable (long-term). Common shares. Retained earnings. 2,940 4,380 Income taxes. 61,160 $103,600 54,000 90,000 Profit 282,000 222,000 27,180 740

Answer rating: 100% (QA)

Cash Flow statement for year ended June 302020 Particulars Amount in Working Cash flows from operati... View the full answer