Jobim Inc. had the following condensed balance sheet at the end of operations for 2019. Jobim Inc.Balance SheetDecember 31, 2019 Cash $ 8,500 Current liabilities $ 15,000 Current assets other than cash 29,000 Long-term notes payable 25,500 Equity investments 20,000 Bonds payable 25,000 Plant assets (net) 67,500 Common stock 75,000 Land 40,000 Retained earnings 24,500 $165,000 $165,000 During 2020, the following occurred. A tract of land was purchased for $9,000. Bonds payable in the amount of $15,000 were redeemed at par. An additional $10,000 in common stock was issued at par. Dividends totaling $9,375 were paid to stockholders. Net income was $35,250 after allowing depreciation of $13,500. Land was purchased through the issuance of $22,500 in bonds. Jobim Inc. sold part of its investment portfolio for $12,875. This transaction resulted in a gain of $2,000 for the company. No unrealized gains or losses were recorded on these investments in 2020. Both current assets (other than cash) and current liabilities remained at the same amount. Instructions Prepare a statement of cash flows for 2020 using the indirect method. Prepare the condensed balance sheet for Jobim Inc. as it would appear at December 31, 2020.

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter9: Long-term Liabilities

Section: Chapter Questions

Problem 103.2C

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Question

Jobim Inc. had the following condensed balance sheet at the end of operations for 2019.

Jobim Inc. Balance Sheet December 31, 2019
Cash		$ 8,500		Current liabilities	$ 15,000
Current assets other than cash	29,000	Long-term notes payable	25,500
Equity investments	20,000	Bonds payable	25,000
Plant assets (net)	67,500	Common stock	75,000
Land	40,000	Retained earnings	24,500
	$165,000		$165,000

During 2020, the following occurred.

A tract of land was purchased for $9,000.
Bonds payable in the amount of $15,000 were redeemed at par.
An additional $10,000 in common stock was issued at par.
Dividends totaling $9,375 were paid to stockholders.
Net income was $35,250 after allowing depreciation of $13,500.
Land was purchased through the issuance of $22,500 in bonds.
Jobim Inc. sold part of its investment portfolio for $12,875. This transaction resulted in a gain of $2,000 for the company. No unrealized gains or losses were recorded on these investments in 2020.
Both current assets (other than cash) and current liabilities remained at the same amount.

Instructions

Prepare a statement of cash flows for 2020 using the indirect method.
Prepare the condensed balance sheet for Jobim Inc. as it would appear at December 31, 2020.

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