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Problem 1: Cash Flow Statement (Class Practice)

Sinjh Inc. saw an increase in cash from $48,400 to $90,800 from 2019 to 2020. During this time period: - New plant assets costing $85,000 were purchased for cash. - An old plant asset was sold for $1,500 cash. - Bonds matured and were paid off for cash at face value. - Additional common stock was issued for cash at par value. - A $40,350 cash dividend was declared and paid. - Additional cash investments were made at par value.

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560 views2 pages

Problem 1: Cash Flow Statement (Class Practice)

Sinjh Inc. saw an increase in cash from $48,400 to $90,800 from 2019 to 2020. During this time period: - New plant assets costing $85,000 were purchased for cash. - An old plant asset was sold for $1,500 cash. - Bonds matured and were paid off for cash at face value. - Additional common stock was issued for cash at par value. - A $40,350 cash dividend was declared and paid. - Additional cash investments were made at par value.

Uploaded by

ronami
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Problem 1: Cash Flow Statement (Class Practice)

Condensed financial data of Sinjh Inc. follow:


SINJH INC.
Comparative Balance Sheets
December 31
Assets 2020 2019
Cash $ 90,800 $ 48,400
Accounts Receivable 92,800 33,000
Inventory 112,500 102,850
Prepaid Expenses 28,400 26,000
Investments 138,000 114,000
Plant Assets 270,000 242,500
Accumulated Depreciation (50,000) (52,000)
Total $ 682,500 $ 514,750

Liabilities and Owners' Equity


Accounts Payable $ 112,000 $ 67,300
Accrued Expense Payable 16,500 17,000
Bonds Payable 110,000 150,000
Common Stock 220,000 175,000
Retained Earnings 224,000 105,450
Total $ 682,500 $ 514,750

SINJH INC.
Income Statement
For the Year Ended December 31, 2020
Sales: $ 392,780
Less:
Cost of Goods Sold $ 135,460
Operating Expenses, excluding depreciation 12,410
Depreciation Expense 46,500
Income Taxes 27,280
Interest Expense 4,730
Loss on Sale of Plant Assets 7,500 233,880
Net Income $ 158,900
Additional information:
1. New plant assets costing $85,000 were purchased for cash during the year.
2. An old plant asset (having original cost of $ 57,500 and accumulated depreciation of Tk. 48,500)
was sold for $1,500 cash.
3. Bonds matured and were paid off at face value for cash.
4. Additional common stock was issued in cash at par.
5. A cash dividend of $40,350 was declared and paid during the year.
6. Additional investment was made in cash at par.
Requirement: Prepare a statement of cash for the year ended on December 31, 2020
Problem 2: Cash Flow Statement (Self Practice)
The comparative balance sheets for Strackman Lux Company as of December 31 are presented below.
Strackman Lux Company
Comparative Balance Sheets
December 31
Assets 2020 2019
Cash $ 71,000 $ 45,000
Accounts Receivable 44,000 62,000
Inventory 151,450 142,000
Prepaid Expenses 15,280 21,000
Land 105,000 130,000
Equipment 228,000 155,000
Accumulated Depreciation- Equipment (45,000) (35,000)
Buildings 200,000 200,000
Accumulated Depreciation-Buildings (60,000) (40,000)
Total $ 709,730 $ 680,000

Liabilities and Stockholder's Equity


Accounts Payable $ 47,730 $ 40,000
Bonds Payable 260,000 300,000
Common Stock, $1 Par 200,000 160,000
Retained Earnings 202,000 180,000
Total $ 709,730 $ 680,000

Additional Information:
1. Operating expenses include depreciation expense of $42,000.
2. Land was sold for cash at book value.
3. Cash dividends of $15,000 were paid.
4. Net income for 2020 was $37,000.
5. Equipment was purchased for $95,000 cash. In addition, equipment costing $22,000 with a book
value of $10,000 was sold for $6,000 cash.
6. Bonds were converted at face value by issuing 40,000 shares of $1 par value common stock.

Requirement: Prepare a statement of cash flows for the year ended December 31, 2020

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