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The comparative balance sheet for Tandem Company, a private company reporting under ASPE, is shown below in the condensed form.
Tandem Company
Comparative Balance Sheet
December 31, 2020
| | | |
| | | |
| | 2020 | 2019 |
| Cash | $ 72,000 | $ 42,500 |
| Accounts receivable | 61,000 | 70,200 |
| Inventory | 121,000 | 105,000 |
| Long-term investments | | 100,000 |
| Equipment | 515,000 | 425,000 |
| Accumulated depreciationequipment | (153,000) | (175,000) |
| Total Assets | $616,000 | $567,700 |
| | | |
| Accounts payable | $ 59,750 | $ 47,250 |
| Bonds payable, due in 2020 | | 75,000 |
| Common shares | 425,000 | 350,000 |
| Retained earnings | 131,250 | 95,450 |
| Total Liabilities and Shareholders Equity | $616,000 | $567,700 |
Additional information for fiscal year 2020:
| a. | Profit was $75,800. |
| b. | Depreciation expense reported on income statement was $38,000. |
| c. | Fully depreciated equipment, originally costing $60,000, was scrapped. New equipment was purchased for $150,000 in cash. |
| d. | Bonds payable of $75,000 were retired by payment of their face value amount. |
| e. | Common shares were issued for $75,000. |
| f. | Cash dividends were declared and paid to the common shareholders during the year. |
| g. | Long-term investments of $100,000 were sold for $125,000 in cash. Instructions: |
Prepare a cash flow statement for the year ended December 31,2020 using the indirect method.
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