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Comprehensive The following are Farrell Corporation’s balance sheets as of December 31, 2019, and 2018, and the statement of income and retained earnings for the year ended December 31, 2019: Additional information: a. On January 2, 2019, Farrell sold equipment costing $45,000, with a book value of $24,000, for $19,000 cash. b. On April 2, 2019, Farrell issued 1, 000 shares of common stock for $23,000 cash. c. On May 14, 2019, Farrell sold all of its treasury stock for $25,000 cash. d. On June 1, 2019, Farrell paid $50, 000 to retire bonds with a face value (and book value) of $50, 000. e. On July 2, 2019, Farrell purchased equipment for $63, 000 cash. f. On December 31, 2019, land with a fair market value of $150,000 was purchased through the issuance of a long-term note in the amount of $150,000. The note bears interest at the rate of 15% and is due on December 31, 2021. g. Deferred taxes payable represent temporary differences relating to the use of accelerated depreciation methods for income tax reporting and the straight-line method for financial statement reporting. Required: 1. Prepare a spreadsheet to support a statement of cash flows for Farrell for the year ended December 31, 2019, based on the preceding information. 2. Prepare the statement of cash flows. ( Appendix 21.1 ) Spreadsheet and Statement Refer to the information for Farrell Corporation in P21-13. Required: 1. Using the direct method for operating cash flows, prepare a spreadsheet to support a 2019 statement of cash flows. ( Hint: Combine the income statement and December 31, 2019, balance sheet items for the adjusted trial balance. Use a retained earnings balance of $291,000 in this adjusted trial balance.) 2. Prepare the statement of cash flows. (A separate schedule reconciling net income to cash provided by operating activities is not necessary.)

BuyFind

Intermediate Accounting: Reporting...

3rd Edition
James M. Wahlen + 2 others
Publisher: Cengage Learning
ISBN: 9781337788281
BuyFind

Intermediate Accounting: Reporting...

3rd Edition
James M. Wahlen + 2 others
Publisher: Cengage Learning
ISBN: 9781337788281

Solutions

Chapter
Section
Chapter 21, Problem 16P
Textbook Problem

Comprehensive The following are Farrell Corporation’s balance sheets as of December 31, 2019, and 2018, and the statement of income and retained earnings for the year ended December 31, 2019:

Chapter 21, Problem 16P, Comprehensive The following are Farrell Corporations balance sheets as of December 31, 2019, and , example  1

Chapter 21, Problem 16P, Comprehensive The following are Farrell Corporations balance sheets as of December 31, 2019, and , example  2

Additional information:

  1. a. On January 2, 2019, Farrell sold equipment costing $45,000, with a book value of $24,000, for $19,000 cash.
  2. b. On April 2, 2019, Farrell issued 1, 000 shares of common stock for $23,000 cash.
  3. c. On May 14, 2019, Farrell sold all of its treasury stock for $25,000 cash.
  4. d. On June 1, 2019, Farrell paid $50, 000 to retire bonds with a face value (and book value) of $50, 000.
  5. e. On July 2, 2019, Farrell purchased equipment for $63, 000 cash.
  6. f. On December 31, 2019, land with a fair market value of $150,000 was purchased through the issuance of a long-term note in the amount of $150,000. The note bears interest at the rate of 15% and is due on December 31, 2021.
  7. g. Deferred taxes payable represent temporary differences relating to the use of accelerated depreciation methods for income tax reporting and the straight-line method for financial statement reporting.

Required:

  1. 1. Prepare a spreadsheet to support a statement of cash flows for Farrell for the year ended December 31, 2019, based on the preceding information.
  2. 2. Prepare the statement of cash flows.

(Appendix 21.1) Spreadsheet and Statement Refer to the information for Farrell Corporation in P21-13.

Required:

  1. 1. Using the direct method for operating cash flows, prepare a spreadsheet to support a 2019 statement of cash flows. (Hint: Combine the income statement and December 31, 2019, balance sheet items for the adjusted trial balance. Use a retained earnings balance of $291,000 in this adjusted trial balance.)
  2. 2. Prepare the statement of cash flows. (A separate schedule reconciling net income to cash provided by operating activities is not necessary.)

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Chapter 21 Solutions

Intermediate Accounting: Reporting And Analysis
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