5 The following comparative balance sheet is given for Estern Co.:4AssetsDec 31, 2021Dec.31.2020Cash$117,000$19,500Notes Receivable24,00021,000Supplies & Inventory27,00040,500Prepaid expense10,50018,000Long-term investments027,000Machines and tools55,50048,000(21.000)(15.000)Accumulated depreciation-equipmentTotal Assets$213.000$159.000Liabilities & Stockholders' EquityAccounts payable$ 25,500$ 10,50055,50070,500Bonds payable (long-term)Common Stock60,00034,500Retained Earnings72.00043.500Total Liabilities & Stockholders'$213.000$159.000EquityIncome Statement Information (2021):1. Net income for the year ending December 31, 2021 is $43,500.2. Depreciation expense is $6,000.3. There is a loss of $3,000 resulted from the sale of long-term investment.Additional information (2021):1. All sales and purchases of inventory are on account (or credit)2. Received cash for the sale of long-term investments that had a cost of $27,000, yielding a $3,000 loss.3. Cash dividends paid is $15,000.+ The company purchased new machines and tools for $7,500 cash. Question Completion Status:AssetsDec 31, 2021Dec 31, 2020Cash$117,000$19,500Notes Receivable24,00021,000Supplies & Inventory27,00040,500Prepaid expense18,00010,500027,000Long term investmentsMachines and tools55,50048,000(21.000)(15.000)Accumulated depreciation equipmentTotal Assets$213.000$159.000Liabilities & Stockholders' EquityAccounts payable$ 25,500$ 10,500Bonds payable (long-term)55,50070,500Common Stock60,00034,500Retained Earnings72,00043.500Total Liabilities & Stockholders'$213.000$159.000EquityIncome Statement Information (2021):1. Net income for the year ending December 31, 2021 is $43,500,2. Depreciation expense is $6,000.3. There is a loss of $3,000 resulted from the sale of long-term investment.Additional information (2021):1. All sales and purchases of inventory are on account (or credit).2. Received cash for the sale of long-term investments that had a cost of $27,000, yielding a $3,000 loss.3. Cash dividends paid is $15,000.4. The company purchased new machines and tools for $7,500 cash.Required:Prepare the FIRST (Operating) and the SECOND (Investing) sections of the statement of cash flows for the year ended December 31, 2021.

The Operating and Investing section for the year ended December 31st, 2021 is as below.

Assets Dec 31, 2021 $117,000 24,000 DCIT. 202 $19,500 Cash Notes Receivable Supplies & Inventory 21,000 27,000 40,500 Prepaid expense 18,000 10,500 0 Long-term investments Machines and tools 27,000 55,500 48,000 (21.000) Accumulated depreciation equipment Total Assets (15.000) $213.000 $159.000 Liabilities & Stockholders' Equity Accounts payable $ 25,500 $ 10,500 55,500 70,500 Bonds payable (long-term) Common Stock 60,000 34,500 Retained Earnings 72.000 43.500 Total Liabilities & Stockholders' $213.000 $159.000 Equity Income Statement Information (2021): 1. Net income for the year ending December 31, 2021 is $43,500. 2. Depreciation expense is $6,000. 3. There is a loss of $3,000 resulted from the sale of long-term investment. Additional information (2021): 1. All sales and purchases of inventory are on account (or credit). 2. Received cash for the sale of long-term investments that had a cost of $27,000, yielding a $3,000 loss. 3. Cash dividends paid is $15,000. 4. The company purchased new machines and tools for $7,500 cash. Required: Prepare the FIRST (Operating) and the SECOND (Investing) sections of the statement of cash flows for the year ended December 31, 2021.

Assets Dec 31, 2021 $117,000 24,000 DCIT. 202 $19,500 Cash Notes Receivable Supplies & Inventory 21,000 27,000 40,500 Prepaid expense 18,000 10,500 0 Long-term investments Machines and tools 27,000 55,500 48,000 (21.000) Accumulated depreciation equipment Total Assets (15.000) $213.000 $159.000 Liabilities & Stockholders' Equity Accounts payable $ 25,500 $ 10,500 55,500 70,500 Bonds payable (long-term) Common Stock 60,000 34,500 Retained Earnings 72.000 43.500 Total Liabilities & Stockholders' $213.000 $159.000 Equity Income Statement Information (2021): 1. Net income for the year ending December 31, 2021 is $43,500. 2. Depreciation expense is $6,000. 3. There is a loss of $3,000 resulted from the sale of long-term investment. Additional information (2021): 1. All sales and purchases of inventory are on account (or credit). 2. Received cash for the sale of long-term investments that had a cost of $27,000, yielding a $3,000 loss. 3. Cash dividends paid is $15,000. 4. The company purchased new machines and tools for $7,500 cash. Required: Prepare the FIRST (Operating) and the SECOND (Investing) sections of the statement of cash flows for the year ended December 31, 2021.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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