Scenario: The 2021 comparative balance sheet and income statement of Auga Company Ltd, have just been distributed at a meeting of the company’s board of directors. The members of the board of directors were desirous of knowing the reason or reasons why the cash balance different from the net income. The company uses the indirect method to prepare the statement of cash flows and it is expected that this should be able to provide the needed clarity required by the directors. The directors have asked each student from your accounting course to assist with the needed clarification and have put forward the attached financial information. Notes Acquisition of plant asset during 2021 600,900 Sale proceeds from sale of plant asset 356,000 Receipt for issuance of notes payable 384,900 Payment for note payable 450,000 Dividend paid 148,500 Book value of equipment sold 240,500 1. Requirements B. Prepare a complete statement of cash flows for 2021 using the indirect method.
Scenario: The 2021 comparative balance sheet and income statement of Auga Company Ltd, have just been distributed at a meeting of the company’s board of directors. The members of the board of directors were desirous of knowing the reason or reasons why the cash balance different from the net income. The company uses the indirect method to prepare the statement of cash flows and it is expected that this should be able to provide the needed clarity required by the directors. The directors have asked each student from your accounting course to assist with the needed clarification and have put forward the attached financial information. Notes Acquisition of plant asset during 2021 600,900 Sale proceeds from sale of plant asset 356,000 Receipt for issuance of notes payable 384,900 Payment for note payable 450,000 Dividend paid 148,500 Book value of equipment sold 240,500 1. Requirements B. Prepare a complete statement of cash flows for 2021 using the indirect method.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Scenario:
The 2021 comparative balance sheet and income statement of Auga Company Ltd, have just been distributed at a meeting of the company’s board of directors. The members of the board of directors were desirous of knowing the reason or reasons why the cash balance different from the net income. The company uses the indirect method to prepare the statement of cash flows and it is expected that this should be able to provide the needed clarity required by the directors.
The directors have asked each student from your accounting course to assist with the needed clarification and have put forward the attached financial information.
|
Notes |
||
|
Acquisition of plant asset during 2021 |
600,900 |
|
|
Sale proceeds from sale of plant asset |
356,000 |
|
|
Receipt for issuance of notes payable |
384,900 |
|
|
Payment for note payable |
450,000 |
|
|
Dividend paid |
148,500 |
|
|
Book value of equipment sold |
240,500 |
1. Requirements
B. Prepare a complete statement of cash flows for 2021 using the indirect method.
Transcribed Image Text:Auga Company Ltd.
Income Statement
Year Ended December 31,2021
Revenues and gains:
Sales revenue
2,224,000
115,500
Gain on sale of plant assets
Total revenues and gains
Expenses
Cost of goods sold
Depreciation expense
Other operating expense
Total expenses
2,339,500
1,305,000
165,400
405,400
1,875,800
463,700
265,000
198,700
Income before income taxes
Income tax expense
Net Income
Transcribed Image Text:Auga Company Ltd.
Comparative Balance sheet
December 31, 2020, and 2021
2021 (A)
2020 (B)
Increase/(Decrease)
(A-B)
Particulars
Assets
Cash
238,000
215,200
22,800
43,900
10,100
(7,750)
Accounts Receivables
303,200
358,300
259,300
348,200
43,100
Inventories
Prepaid Expenses
Intangible assets
35,350
205,000
205,000
Plant assets, net
1,105,000
910,000
195,000
Total Assets
2,244,850
1,980,800
264,050
Liabilities
Accounts payable
254,300
240,000
14,300
Accrued Liabilities
415,300
410,000
Income tax payable
Long-term notes payable
Stockholder's equity
5,300
(20,400)
(65,100)
115,000
135,400
845,400
910,500
Common Stock
295,500
275,300
20,200
Retained earnings
Treasury stock
345,600
(26,250)
295,400
50,200
(285,800)
259,550
Total liabilities and Stockholder's
2,244,850
1,980,800
264,050
equity
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