Reference no: EM133086044
Question - Comparative statement of financial position for Company X. Dec 31, 2020:
Cash = 22000
Accounts receivable = 25000
Inventory = 17000
Land = 0
Equipment, net = 16000
Total assets = 80000
Acc payable = 25000
Long term notes payable = 11000
Common shares = 12000
Retained earnings = 32000
Total liabilities and Shareholders' equity = 80000
Dec 31, 2021
Cash = 18000
Accounts receivable = 29000
Inventory = 15000
Land = 20000
Equipment, net = 24000
Total assets = 106000
Acc payable = 11000
Long term notes payable = 26000
Common shares = 15000
Retained earnings = 50000
Total liabilities and shareholders' equity = 106000
Additional information:
1. Net earnings for the year ended dec 31, 2021 were $20000
2. Carrying amount of the equipment for both years were determined as follows:
2020: equipment=26000. Less: accumulated depreciation (10000). Net carrying amount = 16000
2021: equipment=30000. Less accumulated depreciation (6000). Net carrying amount = 24000
3. Equipment with a cost of 16000 and accumulated depreciation of 8000 was sold for cash proceeds of 9000 during 2021.
4. Equipment costing 15000 was purchased during the year by issuing a note payable. All other equipment purchases were for cash. There were no other non-cash transactions during the year.
Required - Prepare a statement of cash flows for the year ended Dec 31, 2021 using the indirect method.