50.1K

Verified Solution

Link Copied!

Buffalo Inc., a greeting card company, had the following statements prepared as of December 31, 2020.

BUFFALO INC. COMPARATIVE BALANCE SHEET AS OF DECEMBER 31, 2020 AND 2019
		12/31/20			12/31/19
Cash		$5,900			$7,000
Accounts receivable		61,500			51,300
Short-term debt investments (available-for-sale)		35,000			17,800
Inventory		40,400			60,200
Prepaid rent		5,000			4,000
Equipment		153,400			129,000
Accumulated depreciationequipment		(35,100	)		(25,100	)
Copyrights		46,300			49,600
Total assets		$312,400			$293,800
Accounts payable		$46,500			$40,200
Income taxes payable		4,100			6,000
Salaries and wages payable		8,100			4,000
Short-term loans payable		7,900			10,000
Long-term loans payable		60,200			68,700
Common stock, $10 par		100,000			100,000
Contributed capital, common stock		30,000			30,000
Retained earnings		55,600			34,900
Total liabilities & stockholders equity		$312,400			$293,800

BUFFALO INC. INCOME STATEMENT FOR THE YEAR ENDING DECEMBER 31, 2020
Sales revenue				$338,750
Cost of goods sold				176,400
Gross profit				162,350
Operating expenses				119,600
Operating income				42,750
Interest expense		$11,500
Gain on sale of equipment		2,000		9,500
Income before tax				33,250
Income tax expense				6,650
Net income				$26,600

Additional information:

1.		Dividends in the amount of $5,900 were declared and paid during 2020.
2.		Depreciation expense and amortization expense are included in operating expenses.
3.		No unrealized gains or losses have occurred on the investments during the year.
4.		Equipment that had a cost of $19,900 and was 70% depreciated was sold during 2020.

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

BUFFALO INC. Statement of Cash Flows choose the accounting period: December 31, 2020For the Year Ended December 31, 2020For the Quarter Ended December 31, 2020 December 31, 2020For the Year Ended December 31, 2020For the Quarter Ended December 31, 2020

Answer & Explanation Solved by verified expert

See Answer