Flip Inc., a sporting goods retailer, recently completed its 2020 operations. Flip Inc.’s balance sheet information and income statement follow. Flip Inc. Income Statement for Year Ended December 31, 2020 Sales........................................... $1,061,340 Cost of goods sold..................... 573,300 Gross profit................................ 488,040 Operating expenses: Depreciation expense........... 35,868 Other expenses..................... 384,993 Total operating expenses...... 420,861 Profit from operations................ 67,179 Loss on sale of equipment.......... 2,058 Profit before taxes...................... 65,121 Income taxes.............................. 9,261 Profit.......................................... $55,860 Flip Inc. Comparative Balance Sheet Information December 31 2020 2019 Cash....................................... $133,770 $ 70,119 Accounts receivable.............. 72,618 88,935 Merchandise inventory.......... 445,410 480,396 Prepaid expenses................... 16,758 18,816 Equipment............................. 272,685 211,680 Accumulated depreciation..... 106,575 91,140 Accounts payable.................. 115,101 120,981 Current notes payable............ 16,905 11,025 Notes payable........................ 110,250 80,850 Common shares..................... 473,340 441,000 Retained earnings.................. 119,070 124,950 Additional information regarding Flip Inc.’s activities during 2020: Loss on sale of equipment is $2,058. Equipment costing $49,980 is sold for $27,489. Equipment is purchased by paying cash of $37,485 and signing a long-term note payable for the balance. Borrowed $5,880 by signing a short-term note payable. Reduced a long-term note payable by making a payment. Issued 2,940 common shares for cash at $11 per share. Declared and paid cash dividends. Required Prepare a statement of cash flows for 2020 according to the indirect method. Also prepare a note describing non-cash investing and financing activities

Flip Inc., a sporting goods retailer, recently completed its 2020 operations. Flip Inc.’s balance sheet information and income statement follow. Flip Inc. Income Statement for Year Ended December 31, 2020 Sales........................................... $1,061,340 Cost of goods sold..................... 573,300 Gross profit................................ 488,040 Operating expenses: Depreciation expense........... 35,868 Other expenses..................... 384,993 Total operating expenses...... 420,861 Profit from operations................ 67,179 Loss on sale of equipment.......... 2,058 Profit before taxes...................... 65,121 Income taxes.............................. 9,261 Profit.......................................... $55,860 Flip Inc. Comparative Balance Sheet Information December 31 2020 2019 Cash....................................... $133,770 $ 70,119 Accounts receivable.............. 72,618 88,935 Merchandise inventory.......... 445,410 480,396 Prepaid expenses................... 16,758 18,816 Equipment............................. 272,685 211,680 Accumulated depreciation..... 106,575 91,140 Accounts payable.................. 115,101 120,981 Current notes payable............ 16,905 11,025 Notes payable........................ 110,250 80,850 Common shares..................... 473,340 441,000 Retained earnings.................. 119,070 124,950 Additional information regarding Flip Inc.’s activities during 2020: Loss on sale of equipment is $2,058. Equipment costing $49,980 is sold for $27,489. Equipment is purchased by paying cash of $37,485 and signing a long-term note payable for the balance. Borrowed $5,880 by signing a short-term note payable. Reduced a long-term note payable by making a payment. Issued 2,940 common shares for cash at $11 per share. Declared and paid cash dividends. Required Prepare a statement of cash flows for 2020 according to the indirect method. Also prepare a note describing non-cash investing and financing activities

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter22: Accounting For Changes And Errors.

Section: Chapter Questions

Problem 4RE: Refer to RE22-2. Assume Heller Company had sales revenue of 510,000 in 2019 and 650,000 in 2020....

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Flip Inc., a sporting goods retailer, recently completed its 2020 operations. Flip Inc.’s balance sheet information and income statement follow.

	Flip Inc. Income Statement for Year Ended December 31, 2020
Sales...........................................		$1,061,340
Cost of goods sold.....................		573,300
Gross profit................................		488,040
Operating expenses:
Depreciation expense...........	35,868
Other expenses.....................	384,993
Total operating expenses......		420,861
Profit from operations................		67,179
Loss on sale of equipment..........		2,058
Profit before taxes......................		65,121
	Income taxes..............................		9,261
	Profit..........................................		$55,860

Flip Inc. Comparative Balance Sheet Information
	December 31
	2020	2019
Cash.......................................	$133,770	$ 70,119
Accounts receivable..............	72,618	88,935
Merchandise inventory..........	445,410	480,396
Prepaid expenses...................	16,758	18,816
Equipment.............................	272,685	211,680
Accumulated depreciation.....	106,575	91,140
Accounts payable..................	115,101	120,981
Current notes payable............	16,905	11,025
Notes payable........................	110,250	80,850
Common shares.....................	473,340	441,000
Retained earnings..................	119,070	124,950

Additional information regarding Flip Inc.’s activities during 2020:

Loss on sale of equipment is $2,058.
Equipment costing $49,980 is sold for $27,489.
Equipment is purchased by paying cash of $37,485 and signing a long-term note payable for the balance.
Borrowed $5,880 by signing a short-term note payable.
Reduced a long-term note payable by making a payment.
Issued 2,940 common shares for cash at $11 per share.
Declared and paid cash dividends.

Required

Prepare a statement of cash flows for 2020 according to the indirect method.

Also prepare a note describing non-cash investing and financing activities.

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