60.1K

Verified Solution

Link Copied!

Vandals Company has not yet prepared a formal statement of cashflows for the 2020 fiscal year. Comparative balance sheets as ofDecember 31, 2019, and 2020, and a statement of income and retainedearnings for the year ended December 31, 2020, are presentedbelow.

Vandals Company
Statement of Income and Retained Earnings
For The Year Ended December 31, 2020
($000 Omitted)
Sales						$4,250,000
Expenses
Cost of goods sold					$765,000
Bad debt expense					$21,250
Salaries and benefits					510,000
Heat, light, and power					255,000
Depreciation					8,925
Property taxes					127,500
Patent amortization					1,275
Miscellaneous expenses					116,688
Interest					77,792
Total expenses						1,883,430
Income before income taxes						2,366,570
Income taxes						637,500
Net income						1,729,070
Retained earnings - January 1, 2020						318,750
						2,047,820
Cash dividend declared and issued						12,750
Retained earnings - December 31, 2020						$2,035,070
Vandals Company
Comparative Balance Sheet
December 31
($000 Omitted)
Assets					2020	2019
Current assets
Cash					$1,782,960	$118,575
U.S. Treasury notes (Available-for-sale)					17,000	85,000
Accounts receivable					221,850	136,000
Allowance for doubtful account					(12,325)	(12,750)
Inventory					23,800	29,750
Total current assets					2,033,285	356,575
Long-term assets
Land					19,125	4,250
Buildings and equipment					51,000	21,250
Accumulated depreciation					(21,675)	(12,750)
Patents (less amortization)					7,225	8,500
Total long-term assets					55,675	21,250
Total assets					$2,088,960	$377,825
Liabilities and Stockholders' Equity
Current liabilities
Accounts payable					$20,400	$25,500
Income taxes payable					4,080	5,100
Short-term Notes payable					10,625	10,625
Total current liabilities					35,105	41,225
Long-term notes payable - due 2020					17,000	17,000
Total liabilities					52,105	58,225
Stockholders' equity
Common stock outstanding					1,785	850
Retained earnings					2,035,070	318,750
Total stockholders' equity					2,036,855	319,600
Total liabilities and stockholders' equity					$2,088,960	$377,825

Instructions:                                                                                    

Prepare a statement of cash flows using the direct method.Changes in accounts receivable and in accounts payable relate tosales and cost of sales. Do not prepare a reconciliationschedule.