Additional Problem 12 Sheridan Ltd., which follows ASPE, had the following comparative statement of financial position: Sheridan Ltd. Comparative...

80.2K

Verified Solution

Question

Accounting

Additional Problem 12
Sheridan Ltd., which follows ASPE, had the following comparativestatement of financial position:
Sheridan Ltd.
Comparative Statement of Financial Position
As at December 31
Assets 2018 2017
Cash $ 70,520 $ 43,000
Accounts receivable 116,960 87,720
Inventories 68,800 103,200
Prepaid insurance 8,600 6,880
Equipment 264,880 223,600
Accumulated depreciation-equipment (60,200 ) (43,000 )
Patents 68,800 86,000
Total assets $ 538,360 $ 507,400
Liabilities and Shareholders’Equity
Accounts payable $ 79,120 $ 68,800
Interest payable 6,880 10,320
Wages payable 13,760 6,880
Income taxes payable 13,760 17,200
Long-term note payable 103,200 118,680
Common shares 223,600 223,600
Retained earnings 98,040 61,920
Total liabilities and shareholders’ equity $ 538,360 $ 507,400

Additional information:
1. Net income for the fiscal year was $46,440.
2. Equipment that cost $34,400 and was 70% depreciated was soldduring 2018, for a gain of $3,440.
3. No patents were purchased or sold during the fiscal year.

Prepare the statement of cash flows using the indirect format.(Show amounts that decrease cash flow with either a -sign e.g. -15,000 or in parenthesis e.g. (15,000)

Answer & Explanation Solved by verified expert

4.1 Ratings (621 Votes)

Sheridan Ltd Statement Cash Flows For the year ended December 31 2018 Cash Flow from Operating Activities Net Income 4644000 Add Adjustments Depreciation Expense 4128000 Profit on Disposal of Equipment 344000 Increase in Accounts Receivables 2924000 Decrease in Inventory 3440000 Increase in Prepaid Expenses 172000 Amortization of Patent 1720000 Increase in Accounts Payable See Answer

Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:

Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!

Become a Member

Transcribed Image Text

Additional Problem 12Sheridan Ltd., which follows ASPE, had the following comparativestatement of financial position:Sheridan Ltd.Comparative Statement of Financial PositionAs at December 31Assets20182017Cash$70,520$43,000Accounts receivable116,96087,720Inventories68,800103,200Prepaid insurance8,6006,880Equipment264,880223,600Accumulated depreciation-equipment(60,200)(43,000)Patents68,80086,000Total assets$538,360$507,400Liabilities and Shareholders’EquityAccounts payable$79,120$68,800Interest payable6,88010,320Wages payable13,7606,880Income taxes payable13,76017,200Long-term note payable103,200118,680Common shares223,600223,600Retained earnings98,04061,920Total liabilities and shareholders’ equity$538,360$507,400Additional information:1.Net income for the fiscal year was $46,440.2.Equipment that cost $34,400 and was 70% depreciated was soldduring 2018, for a gain of $3,440.3.No patents were purchased or sold during the fiscal year.Prepare the statement of cash flows using the indirect format.(Show amounts that decrease cash flow with either a -sign e.g. -15,000 or in parenthesis e.g. (15,000)

Sheridan Ltd. Comparative Statement of Financial Position As at December 31
Assets		2018			2017
Cash		$	70,520		$	43,000
Accounts receivable			116,960			87,720
Inventories			68,800			103,200
Prepaid insurance			8,600			6,880
Equipment			264,880			223,600
Accumulated depreciation-equipment			(60,200	)		(43,000	)
Patents			68,800			86,000
	Total assets	$	538,360		$	507,400
Liabilities and Shareholders’Equity
Accounts payable		$	79,120		$	68,800
Interest payable			6,880			10,320
Wages payable			13,760			6,880
Income taxes payable			13,760			17,200
Long-term note payable			103,200			118,680
Common shares			223,600			223,600
Retained earnings			98,040			61,920
	Total liabilities and shareholders’ equity	$	538,360		$	507,400

1.		Net income for the fiscal year was $46,440.
2.		Equipment that cost $34,400 and was 70% depreciated was soldduring 2018, for a gain of $3,440.
3.		No patents were purchased or sold during the fiscal year.