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Matthauson Company has the following comparative balance sheet data available:

	12/31/2019	12/31/2018
Cash	$30,000	$80,000
Accounts receivable, net	160,000	100,000
Inventory	100,000	70,000
Prepaid rent	20,000	10,000
Total current assets	$310,000	$260,000
Equipment	$400,000	$200,000
Accumulated depreciation	(60,000)	(50,000)
Total Assets	$650,000	$410,000
Accounts payable	$50,000	$40,000
Salaries payable	40,000	40,000
Bonds payable	0	50,000
Common stock, $10 par	350,000	100,000
Retained earnings	210,000	180,000
Total liabilities & stockholders' equity	$650,000	$410,000

Additional information:

1. The company reports net income of $100,000 and depreciation expense of $20,000 for the year ending December 31, 2019.

2. Dividends declared and paid in 2019, $70,000.

3. Equipment with a cost of $20,000 and accumulated depreciation of $10,000 was sold for $3,000.

4. New equipment was purchased for cash.

5. No common stock was retired during 2019.

The company also reports the following income statement for the year ending December 31, 2019:

Sales		$1,000,000
Expenses:
Cost of goods sold	600,000	-
Salaries expense	200,000	-
Rent expense	40,000	-
Depreciation expense	20,000	-
Interest expense	3,000	-
Loss on sale of equipment	7,000	-
Total Expenses	-	870,000
Income Before Taxes	-	130,000
Income tax expense		30,000
Net income		$100,000

Using the direct method, prepare the statement of cash flows for the year ending December 31, 2019.

Matthauson Company

Statement of Cash Flows

Year Ended December 31, 2019

B

Carrie Heffernan Company purchased a delivery van on January 1, 2019, for $50,000. The van was expected to remain in service 4 years (or 100,000 miles) and has a residual value of $5,000. The van traveled 30,000 miles the first year, 25,000 miles the second year, and 22,500 miles in the third and fourth years.

Required:

1. Prepare a schedule of depreciation expense per year for the first four years of the asset's life using the (a) straight-line method, (b) units-of-production method, and (c) double-declining-balance method.

2.

2. Prepare a schedule of the book value of the van for each of the four years using the (a) straight-line method, (b) units-of-production method and (c) double-declining-balance method.

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