Question 12
A comparative balance sheet for Rocker Company appearsbelow:
ROCKER COMPANY
Comparative Balance Sheet |
| | | | Dec. 31, 2020 | | | Dec. 31, 2019 | | |
| | Assets | | | | | | | |
| Cash | | | | $34,000 | | | $11,000 | | |
| Accounts receivable | | | | 18,000 | | | 13,000 | | |
| Inventory | | | | 25,000 | | | 17,000 | | |
| Prepaid expenses | | | | 6,000 | | | 9,000 | | |
| Long-term investments | | | | 0 | | | 17,000 | | |
| Equipment | | | | 60,000 | | | 33,000 | | |
| Accumulated depreciation—equipment | | | | (20,000 | ) | | (15,000 | ) | |
| Total assets | | | | $123,000 | | | $85,000 | | |
| Liabilities and Stockholder'sEquity |
| Accounts payable | | | | $17,000 | | | $7,000 | | |
| Bonds payable | | | | 36,000 | | | 45,000 | | |
| Common stock | | | | 40,000 | | | 23,000 | | |
| Retained earnings | | | | 30,000 | | | 10,000 | | |
| Total liabilities and stockholders'equity | | | | $123,000 | | | $85,000 | | |
| Additional information: |
| 1. | | Net income for the year ending December 31, 2020 was$35,000. |
| 2. | | Cash dividends of $15,000 were declared and paid during theyear. |
| 3. | | Long-term investments that had a cost of $17,000 were sold for$14,000. |
| 4. | | Sales for 2020 were $120,000. |
*Prepare a statement of cash flows for the year endedDecember 31, 2020, using the indirect method. (Show amounts thatdecrease cash flow with either a - sign e.g. -15,000 or inparenthesis e.g. (15,000).)
