The 2020 comparative balance sheet and 2020 income statement of Maple Group Ltd, have just been prepare and presented to the owners by the company's Accountant. Upon close examination of the financial information received, it was discovered that some figures in the balance sheet were erroneously omitted due to an oversight by the accountant who is not available to fix the problem due to his unavoidable absence from work. In addition, the owners were concerned about the movement in the company's cash and cash equivalent given that the balance sheet does not show or explain the reason or reasons why there was an increase or decrease in this area. 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 owners. Maple Group Ltd Comparative Balance Sheet December 31, 2020 and 2019 2020 2019 Increase/(Decrease) Assets Cash and cash equivalent ? 31,500 87,500 (10,000) Accounts Receivable ? ? Inventories 97,100 ? Fixed Assets, net 32,000 (20,100) 142,300 ? Total Assets 302,900 323,000 Liabilities Accounts payable 25,600 24,000 58,200 26,600 ? Accrued liabilities ? 1,200 Long-term notes payable Stockholders' Equity: Common Stock Retained earnings Total liabilities and stockholders' equity ? (20,000) ? 131,400 ? 54,800 64,000 (9,200) 302,900 323,000 (20,100)

Question

Requirements:

  1. How can the owners use the cash flow information or what can the statement of cash flows helps the owners to do?
  2. Reconstruct the company’s comparative balance sheet for 2019/2020 using the above information and compute and show the missing figures to include the appropriate sign as a positive or negative figure.
  3. Prepare a complete statement of cash flows for 2020 using the indirect method using the information above.
Maple Group Ltd
Income Statement
Year Ended December 31,2020
Revenues and gains:
Sales revenue
370,000
Interest revenue
11,800
Total revenues and gains
Expenses
Cost of goods sold
Depreciation expense
Other operating expense
Interest expense
381,800
205,500
15,500
126,000
24,300
Total expenses
371,300
10,500
16,300
(5,800)
Income before income taxes
Income tax expense
Net Loss
Notes
Acquisition of fixed asset during 2020
Sale proceed from sale of plant asset
Receipt for issuance of notes payable
Payment for note payable
Dividend paid
Book value of equipment sold
47,500
20,000
3,400
Expand
Transcribed Image Text

Maple Group Ltd Income Statement Year Ended December 31,2020 Revenues and gains: Sales revenue 370,000 Interest revenue 11,800 Total revenues and gains Expenses Cost of goods sold Depreciation expense Other operating expense Interest expense 381,800 205,500 15,500 126,000 24,300 Total expenses 371,300 10,500 16,300 (5,800) Income before income taxes Income tax expense Net Loss Notes Acquisition of fixed asset during 2020 Sale proceed from sale of plant asset Receipt for issuance of notes payable Payment for note payable Dividend paid Book value of equipment sold 47,500 20,000 3,400

The 2020 comparative balance sheet and 2020 income statement of Maple Group Ltd, have just been prepare and presented to the owners by the
company's Accountant. Upon close examination of the financial information received, it was discovered that some figures in the balance sheet
were erroneously omitted due to an oversight by the accountant who is not available to fix the problem due to his unavoidable absence from
work. In addition, the owners were concerned about the movement in the company's cash and cash equivalent given that the balance sheet does
not show or explain the reason or reasons why there was an increase or decrease in this area. 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 owners.
Maple Group Ltd
Comparative Balance Sheet
December 31, 2020 and 2019
2020
2019 Increase/(Decrease)
Assets
Cash and cash equivalent
?
31,500
(10,000)
Accounts Receivable
?
87,500
?
Inventories
97,100
?
?
Fixed Assets, net
Total Assets
142,300
302,900
32,000
(20,100)
?
323,000
Liabilities
Accounts payable
25,600
26,600
?
24,000
58,200
Accrued liabilities
?
1,200
Long-term notes payable
Stockholders' Equity:
Common Stock
Retained earnings
Total liabilities and stockholders' equity
?
(20,000)
?
131,400
?
54,800
64,000
(9,200)
302,900
323,000
(20,100)
Expand
Transcribed Image Text

The 2020 comparative balance sheet and 2020 income statement of Maple Group Ltd, have just been prepare and presented to the owners by the company's Accountant. Upon close examination of the financial information received, it was discovered that some figures in the balance sheet were erroneously omitted due to an oversight by the accountant who is not available to fix the problem due to his unavoidable absence from work. In addition, the owners were concerned about the movement in the company's cash and cash equivalent given that the balance sheet does not show or explain the reason or reasons why there was an increase or decrease in this area. 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 owners. Maple Group Ltd Comparative Balance Sheet December 31, 2020 and 2019 2020 2019 Increase/(Decrease) Assets Cash and cash equivalent ? 31,500 (10,000) Accounts Receivable ? 87,500 ? Inventories 97,100 ? ? Fixed Assets, net Total Assets 142,300 302,900 32,000 (20,100) ? 323,000 Liabilities Accounts payable 25,600 26,600 ? 24,000 58,200 Accrued liabilities ? 1,200 Long-term notes payable Stockholders' Equity: Common Stock Retained earnings Total liabilities and stockholders' equity ? (20,000) ? 131,400 ? 54,800 64,000 (9,200) 302,900 323,000 (20,100)

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