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The comparative balance sheets for Concord Corporation as of December 31 are presented below.
Concord Corporation
Comparative Balance Sheets
December 31
Assets 2021 2022
Cash 1959,840 $39,600
Accounts receivable 44,000 51,040
Inventory 133,276 124,960
Prepaid expenses 13,446 18,480
Land 127,600 114,400
Buildings 176,000 176,000
Accumulated depreciation-buildings (52,800) (35,200)
Equipment 198,000 136,400
Accumulated depreciation-equipment (39,600) (30,800)
Total $659,762 $594,880
Liabilities and Stockholders' Equity
Accounts payable $39,362 $31,680
Bonds payable 264,000 264,000
Common stock, $1 par 176,000 140,800
Retained earnings 180,400 158,400
Total $659,762 $594,880
Additional information:
1. Operating expenses include depreciation expense of $36,960 ($17,600 of depreciation expense for buildings and $19,360 for equipment).
2. Land was sold for cash at book value.
3. Cash dividends of $10,560 were paid.
4. Net income for 2022 was $32,560.
5. Equipment was purchased for $80,960 cash. In addition, equipment costing $19,360 with a book value of $8,800 was sold for $7,040 cash.
6. 35,200 shares of $1 par value common stock were issued in exchange for land with a fair value of $35,200.
Prepare a statement of cash flows for the year ended December 31, 2022, using the indirect method.


Sagot :

Answer:

Concord Corporation

Concord Corporation

Statement of Cash Flows for the year ended December 31, 2022

Operating activities:

Net income                                $32,560

add Depreciation                        36,960

Loss from sale of equipment        1,760

Changes in working capital:

Accounts receivable                    7,040

Inventory                                      -8,316

Prepaid expenses                       5,034

Accounts payable                       7,682

Net cash from operations     $82,720

Investing activities:

Sale of equipment                   $7,040

Sale of land                             22,000

Purchase of equipment         -80,960

Net cash from investments -$51,920

Financing activities:

Dividends payment               -10,560

Net cash flows                    $20,240

Reconciliation:

Beginning cash balance    $39,600

Net cash flows                   $20,240

Ending cash balance         $59,840  

Explanation:

a) Data and Calculations:

Concord Corporation

Comparative Balance Sheets

December 31

Assets                                      2022          2021         Changes

Cash                                     $59,840    $39,600       +$20,240

Accounts receivable              44,000       51,040            -7,040

Inventory                               133,276     124,960            +8,316

Prepaid expenses                  13,446        18,480           -5,034

Land                                     127,600       114,400         +13,200

Buildings                              176,000      176,000           0

Accumulated depreciation

-buildings                           (52,800)     (35,200)         (17,600)

Equipment                          198,000      136,400         +61,600

Accumulated depreciation

-equipment                       (39,600)      (30,800)          (8,800)

Total                               $659,762    $594,880

Liabilities and Stockholders' Equity

Accounts payable           $39,362       $31,680        +$7,682

Bonds payable                264,000      264,000          0

Common stock, $1 par    176,000       140,800       +35,200

Retained earnings           180,400       158,400      +22,000

Total                              $659,762   $594,880

Additional information:

1. Depreciation $36,960

($17,600 of depreciation expense for buildings and $19,360 for equipment)

2. Sale of land at $22,000

3. Cash dividends paid $10,560

4. Net income for 2022 $32,560

5. Equipment purchase $80,960

   Equipment sales $7,040

   Loss from sale $1,760

Accumulated Depreciation $10,560

Equipment

Account Titles          Debit     Credit

Beginning balance  136,400

Cash                         80,960

Sale of equipment                19,360

Ending balance                  198,000

Sale of Equipment

Account Titles          Debit     Credit

Equipment             19,360

Accumulated depreciation   10,560

Cash                                        7,040

Loss from Sale of Equipment 1,760

6. Land $35,200 Common stock $35,200

Land

Account Titles          Debit     Credit

Beginning balance  114,400

Common stock       35,200

Cash                                        22,000

Ending balance                      127,600

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