Respuesta :
Answer:
The Extra Surplus Company
Balance Sheet
December 31, 2020
Assets
Cash                            $14,300
Accounts Receivable                16,000
Inventory                          11,400
Property and Equipment, Net         37,000
                               $78,700
Liabilities and Stockholders' Equity
Accounts Payable                  $3,700
Other Expenses Payable              900
Notes Payable, Long-Term           5,200
Common Stock                   46,000
Retained Earnings                 22,900
                              $78,700
b. The Extra Surplus Company
Statement of Cash Flows, using the direct method:
December 31, 2020
Operating activities:
Cash from customers    $14,400
Payment to suppliers     (10,300)
Payment to labor         (5,400)
Net cash from operating          (1,300)
Investing activities:
Land sales               9,000
Land                  (18,000)
Net cash from investing          (9,000)
Financing activities:
Issue of shares          18,000
Note Payable Repayment  (1,800)
Interest paid             (1,800)
Dividends              (3,800)
Net cash from financing  10,600   10,600
Net Cash Inflow                  $300
Explanation:
a) Data and Calculations:
Extra Surplus Company
Balance Sheet
December 31, 2017
Assets                                  Adjustment    Balance    Â
Cash                          $14,000    300          $14,300
Accounts Receivable              7,000   + 23,400 - 14,400 16,000
Inventory                       16,800   - 5,400          11,000
Property and Equipment, Net      28,000   - 9,000 + 18,000  37,000
                            $65,800
Liabilities and Stockholders' Equity
Accounts Payable               $14,000   -10,300          3,700
Notes Payable, Long-Term         7,000    -1,800          5,200
Common Stock                 28,000    + 18,000       46,000
Retained Earnings               16,800                 22,900
                            $65,800
ii) Extra Surplus Company
Income Statement
For the Year Ended December 31, 2018
Sales                   $23,400
Cost of Goods Sold         5,400
Salaries and Wage Expense  5,400
Interest Expense           1,800
Other Expenses             900
Net Income              $9,900
Cash balance (beginning) $14,000
iii) Cash Receipts:
Cash from customers    $14,400
Land sales               9,000
Issue of shares          18,000
Total receipts          $41,400
iv) Cash Payments:
Land                  $18,000
Note Payable Repayment   1,800
Interest paid             1,800
Dividends               3,800
Accounts Payable       10,300
Salaries & Wages        5,400
Total payments        $41,100
Cash Balance (Ending) Â $14,300
v) Retained Earnings:
Net Income               $9,900
Beginning Retained Earnings 16,800
Dividends                  3,800
Ending Retained Earnings  $22,900
v) The Extra Surplus Company's Statement of Cash Flows can also be prepared using the indirect method. Â This method starts with the net income and adjusts working capital changes after adding back non-cash flow expenses in order to arrive at the net cash from operating activities. Â Other steps are similar to the direct method, which considers only the actual cash inflows and outflows.