Reference no: EM132406865

Question

A comparative statement of financial position for Carmichael Industries Inc. follows:

CARMICHAEL INDUSTRIES INC. Statement of Financial PositionDecember 31, 2020

December 31

Assets 2020 2019

Cash $21,000 $34,000

Accounts receivable 104,000 54,000

Inventory 220,000 189,000

Land 71,000 110,000

Equipment 260,000 200,000

Accumulated depreciation-equipment (69,000) (42,000)

Total $607,000 $545,000

Liabilities and Shareholders' Equity

Accounts payable $52,000 $59,000

Bonds payable 150,000 200,000

Common shares 214,000 164,000

Retained earnings 191,000 122,000

Total $607,000 $545,000

Additional information:

1. Net income for the fiscal year ending December 31, 2020, was $129,000.

2. Cash dividends of $60,000 were declared and paid. Dividends paid are treated as financing activities.

3. Bonds payable amounting to $50,000 were retired through issuance of common shares.

4. Land was sold at a gain of $5,000.5.No equipment was sold during the year.

Prepare a statement of cash flows using the indirect method.