ulation is attached in as image" Changes in the company's balance sheet accounts over the year are summarized as follows: 1. Accounts receivable decreased by $85,000. 2. Accrued Interest Receivable increased by $15,000. 3. Inventory decreased by $280,000. 4. Accounts payable related to suppliers of merchandise decreased by $240,000. 5. Short-term prepayments of operating expenses decreased by $18,000. 6. Accrued liabilities for operating expenses
You are the chief accountant for Bengal Products Inc. Your junior accountant has prepared an income statement for the current year and prepared the following additional information by analyzing changes in the company's balance sheet accounts.
"Calculation is attached in as image"
Changes in the company's balance sheet accounts over the year are summarized as follows:
1.
2. Accrued Interest Receivable increased by $15,000.
3. Inventory decreased by $280,000.
4. Accounts payable related to suppliers of merchandise decreased by $240,000.
5. Short-term prepayments of operating expenses decreased by $18,000.
6. Accrued liabilities for operating expenses increased by $35,000.
7. Liability for accrued interest payable decreased by $16,000.
8. Liability for accrued income taxes payable increased by $25,000. 9. As an investment, $120,000 of marketable securities were purchased during the year.
10. Marketable securities with a book value of $210,000 were sold.
11. $250,000 was invested as a loan to another company.
12. $190,000 of loans given before were collected.
13. $3,800,000 of plant assets were purchased for cash.
14. Plant assets with a book value of $360,000 were sold during the year.
15. $740,000 were borrowed as notes payable (long term).
16. $620,000 of notes payable (long term) were paid during the year.
17. Bonds payable issued during the year was $1,100,000.
18. $890,000 of capital stock was issued during the year.
19.
20. Dividend was declared and paid in cash during the year.
20. Cash balance at the beginning of the year was $448,000 and at the end of the year was $330,000.
21. All investing and financing activities were cash transactions.
Your task:
Prepare a complete statement of cash flows for Bengal Products Inc. for the year 2020 using the direct method and show the reconciliation of cash flow from operating activities using the indirect method.
Step by step
Solved in 3 steps
