Condensed financial data of Pearl Company for 2020 and 2019 are presented below.Additional information:During the year, $70 of common stock was issued in exchange for plant assets. No plant assets were sold in 2020.Prepare a statement of cash flows using the indirect method PEARL COMPANYINCOME STATEMENTFOR THE YEAR ENDED DECEMBER 31, 2020Sales revenue$6,810Cost of goods sold4,680Gross margin2,130Selling and administrative expenses920Income from operations1,210Other revenues and gainsGain on sale of investments80Income before tax1,290Income tax expense530Net income760Cash dividends260Income retained in business$500 PEARL COMPANYCOMPARATIVE BALANCE SHEETAS OF DECEMBER 31, 2020 AND 201920202019Cash$1,810$1,120Receivables1,7901,330Inventory1,5701,940Plant assets1,8701,740Accumulated depreciation(1,230 )(1,150 )Long-term investments (held-to-maturity)1,3001,440$7,110$6,420Accounts payable$1,220$910Accrued liabilities200260Bonds payable1,3701,550Common stock1,8601,740Retained earnings2,4601,960$7,110$6.420

Proceeds from sale of long term investment = 1,440 - 1,300 + 80 = 220

PEARL COMPANY COMPARATIVE BALANCE SHEET AS OF DECEMBER 31, 2020 AND 2019 2020 2019 Cash $1,810 $1,120 Receivables 1,790 1,330 Inventory 1,570 1,940 Plant assets 1,870 1,740 Accumulated depreciation (1,230 ) (1,150 ) Long-term investments (held-to-maturity) 1,300 1,440 $7,110 $6,420 Accounts payable $1,220 $910 Accrued liabilities 200 260 Bonds payable 1,370 1,550 Common stock 1,860 1,740 Retained earnings 2,460 1,960 $7,110 $6,420

PEARL COMPANY COMPARATIVE BALANCE SHEET AS OF DECEMBER 31, 2020 AND 2019 2020 2019 Cash $1,810 $1,120 Receivables 1,790 1,330 Inventory 1,570 1,940 Plant assets 1,870 1,740 Accumulated depreciation (1,230 ) (1,150 ) Long-term investments (held-to-maturity) 1,300 1,440 $7,110 $6,420 Accounts payable $1,220 $910 Accrued liabilities 200 260 Bonds payable 1,370 1,550 Common stock 1,860 1,740 Retained earnings 2,460 1,960 $7,110 $6,420

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

Chapter12: Intangibles

Section: Chapter Questions

Problem 10MC

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