Preparing a Cash Flow Statement—Indirect Method Sketchers Corporation’s recent comparative balance sheet and income statement follow. Balance Sheets, December 31 2019 2020 Assets Cash and cash equivalents $12,800 $54,400 Accounts receivable (net) 16,000 28,800 Inventory 32,000 38,400 Investment, long-term 6,400 Plant assets 96,000 150,400 Accumulated depreciation (16,000) (22,400) Total assets $147,200 $249,600 Liabilities and Stockholders’ Equity Accounts payable $9,600 $16,000 Notes payable, short-term (nontrade) 12,800 9,600 Notes payable, long-term 32,000 57,600 Common stock, no-par 80,000 128,000 Retained earnings 12,800 38,400 Total liabilities andstockholders’ equity $147,200 $249,600 Income Statement, For Year Ended December 31 2020 Sales revenue $480,000 Cost of goods sold (288,000) Gross margin 192,000 Depreciation expense (6,400) Other operating expenses (104,400) Net income $83,200 Additional Information 1. Sold the long-term investment at cost, for cash. 2. Declared and paid a cash dividend of $22,400. 3. Purchased plant assets that cost $54,400; gave a $38,400 long-term note payable and paid $16,000 cash. 4. Paid a $12,800 long-term note payable by issuing common stock; market value, $12,800. 5. Issued a stock dividend, $35,200. Required Prepare the statement of cash flows for Sketchers Corporation for the year ended December 31, 2020, assuming the indirect method in presenting cash flows from operating activities.
Preparing a Cash Flow Statement—Indirect Method
Sketchers Corporation’s recent comparative balance sheet and income statement follow.
Balance Sheets, December 31 | 2019 | 2020 |
---|---|---|
Assets | ||
Cash and cash equivalents | $12,800 | $54,400 |
Accounts receivable (net) | 16,000 | 28,800 |
Inventory | 32,000 | 38,400 |
Investment, long-term | 6,400 | |
Plant assets | 96,000 | 150,400 |
(16,000) | (22,400) | |
Total assets | $147,200 | $249,600 |
Liabilities and |
||
Accounts payable | $9,600 | $16,000 |
Notes payable, short-term (nontrade) | 12,800 | 9,600 |
Notes payable, long-term | 32,000 | 57,600 |
Common stock, no-par | 80,000 | 128,000 |
Retained earnings | 12,800 | 38,400 |
Total liabilities andstockholders’ equity | $147,200 | $249,600 |
Income Statement, For Year Ended December 31 |
2020 |
---|---|
Sales revenue | $480,000 |
Cost of goods sold | (288,000) |
Gross margin | 192,000 |
Depreciation expense | (6,400) |
Other operating expenses | (104,400) |
Net income | $83,200 |
Additional Information
1. Sold the long-term investment at cost, for cash.
2. Declared and paid a cash dividend of $22,400.
3. Purchased plant assets that cost $54,400; gave a $38,400 long-term note payable and paid $16,000 cash.
4. Paid a $12,800 long-term note payable by issuing common stock; market value, $12,800.
5. Issued a stock dividend, $35,200.
Required
Prepare the statement of cash flows for Sketchers Corporation for the year ended December 31, 2020, assuming the indirect method in presenting cash flows from operating activities.
Statement of Cash Flows For the Year Ended December 31, 2020 |
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Cash flows from operating activities | |
Net income | Answer
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Adjustments: | |
Answer | Answer
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Increase in accounts receivable, net | Answer
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Increase in inventory | Answer
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Increase in accounts payable | Answer
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Net cash provided (used) by operating activities | Answer
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Cash flows from investing activities | |
Sale of long-term investment | Answer
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Answer | Answer
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Net cash provided (used) by investing activities | Answer
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Cash flows from financing activities | |
Answer | Answer
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Cash paid for dividends | Answer
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Net cash provided (used) by financing activities | Answer
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Net increase in cash and cash equivalents during 2020 | Answer
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Cash and cash equivalents, January 1, 2020 | Answer
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Cash and cash equivalents, December 31, 2020 | Answer
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Noncash Disclosure | |
Exchanged plant assets for long-term note | Answer
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Issuance of common stock for long-term note payment | Answer
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