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Instructions:
Using the balance sheet and additional information provided prepare an indirect cash flow analysis for the year ended December 31, 2021.
| Winter Corp |
| Comparative Balance Sheet |
| For the Years Ending 2021 and 2020 |
| Assets |
| | 2021 | 2020 | |
| Cash | $202,470 | $30,000 | |
| Marketable Securities | 36,000 | 47,000 | |
| Accounts Receivable | 68,000 | 72,000 | |
| Inventory | 96,000 | 89,000 | |
| Prepaid Insurance | 3,000 | 3,500 | |
| Equipment | 340,000 | 280,000 | |
| Less Accumulated Depreciation | -167,000 | -112,000 | |
| Building | 750,000 | 600,000 | |
| Less Accumulated Depreciation | -102,270 | -100,000 | |
| Patent | 19,000 | 20,000 | |
| Total Assets | $1,245,200 | $929,500 | |
| Liabilities and Owners Equity |
| Short-term Notes Payable | $140,000 | $50,000 | |
| Accounts Payable | 10,000 | 15,000 | ($5,000) |
| Salaries Payable | 10,000 | 8,000 | $2,000 |
| Interest Payable | 9,000 | 1,000 | $8,000 |
| Income Tax Payable | 14,200 | 10,000 | $4,200 |
| Mortgage Payable | 80,000 | 100,000 | |
| Bonds Payable | 150,000 | 200,000 | |
| Common Stock | 732,000 | 516,000 | |
| Retained Earnings | 100,000 | 29,500 | |
| Total Liabilities and Owners Equity | $1,245,200 | $929,500 | |
Additional Information:
1. Sales equal $ 980,000.
2. Cost of Goods Sold equals 60% of sales
3. Operating income is $ 200,000.
4. Interest expense is $ 12,000.
5. Income Tax rate is 35%.
6. Cost of equipment sold was $ 80,000.
7. Purchased equipment paying 40% down. The equipment was financed through shortterm loans.
8. Accumulated depreciation on equipment sold was $ 20,000.
9. Gain on equipment sold was $ 3,000.
10. Purchased building by issuing common stock for $ 200,000 and paying $ 50,000 in cash
11. Book value of building sold was $75,000. Received $ 69,000 in cash from sale of building.
12. Purchased marketable securities for $ 9000.
13. Sold marketable securities at a loss of $ 1000.
Answer & Explanation
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