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Balance Sheets at Dec. 31, Years 1 and 2: Statement of Cash Flows: (5562.1)
Balance Sheets at Dec. 31, Years 1 and 2: Statement of Cash Flows: (5562.1)
Balance Sheets at Dec. 31, Years 1 and 2: Statement of Cash Flows: (5562.1)
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Balance Sheets
At Dec. 31, Years 1 and 2
Year 1 Year 2
Assets:
Cash $350 $480
AR 700 650
Supplies 200 150
Ppd. Rent 100 0
Inventory 200 600
PPE 3,000 3,800
(Acc. Depr.) (500) (600)
Investments 100 400
Patents 800 850
$4,950 $6,330
Liab & OE
AP $140 $110
Div'd Pay. 0 100
Sal. Pay 300 120
Rent Pay 0 500
Int. Pay 50 120
BP + Prem 1,900 2,340
CC + APIC 1,800 2,100
RE 760 940
$4,950 $6,330
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Income Statement
For the Year ended 12/31/Yr. 2
Sales $6,800
Other Information:
● The firm sold PPE for $1,800 Cash. The asset’s original cost had been $2,200.
●The firm bought PPE paying Cash. This was the only PPE purchased in Year 2.
●The firm issued 400 bonds receiving $450 in cash. Bonds have face values of $1 each.
●The firm sold a Patent for $600 Cash. Patents were purchased in Year 2 for Cash.
●The firm received an additional investment from the owners.
●Accounts Payable are related to purchases of inventory.
●Amortization Expense of Patents is the equivalent of Depreciation Expense on PPE.
Required: Prepare a statement of Cash Flows using the indirect method. Then, prepare
the operating section using the direct method.