A comparative statement of financial position for SheffieldIndustries Inc. follows:
SHEFFIELDINDUSTRIES INC.
Statement of Financial Position
December 31, 2020 |
| December31 |
| Assets | 2020 | | | 2019 | |
| Cash | $22,500 | | | $35,500 | |
| Accounts receivable | 117,000 | | | 55,300 | |
| Inventory | 231,000 | | | 199,000 | |
| Land | 86,000 | | | 130,000 | |
| Equipment | 278,000 | | | 204,000 | |
| Accumulateddepreciation—equipment | (70,500 | ) | | (42,900 | ) |
| Total | $664,000 | | | $580,900 | |
| | | | | |
| Liabilities andShareholders’ Equity | | | | | |
| Accounts payable | $52,700 | | | $60,200 | |
| Bonds payable | 164,400 | | | 218,400 | |
| Common shares | 234,000 | | | 180,000 | |
| Retained earnings | 212,900 | | | 122,300 | |
| Total | $664,000 | | | $580,900 | |
Additional information:
| 1. | | Net income for the fiscalyear ending December 31, 2020, was $142,000. |
| 2. | | Cash dividends of $51,400were declared and paid. Dividends paid are treated as financingactivities. |
| 3. | | Bonds payable amounting to$54,000 were retired through issuance of common shares. |
| 4. | | Land was sold at a gain of$3,000. |
| 5. | | No equipment was sold duringthe year. |
(a) Prepare a statement of cash flowsusing the indirect method.
