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The 2020 and 2019 comparative balance sheets for Entertainment 720 showed the following. To save...

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Question

Accounting

The 2020 and 2019 comparative balance sheets for Entertainment 720 showed the following. To save time, I provided a change column for the balance sheet, which is 2020 minus 2019 amounts.

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Additional information:

  1. Net income for the year was $50.
  2. Depreciation expense was $14.
  3. $2 of accounts receivable were written off as uncollectible.
  4. PP&E purchased 6 years ago for $10 was sold at a loss of $3. A/D on the equipment was $5.
  5. PP&E was purchased by signing a note for $10 and paying cash for the remainder.
  6. Issued common stock for cash
  7. Any and all dividends were cash.

Instructions

Prepare the 2020 statement of cash flows (using the indirect method for cash flows from operations) for Entertainment 720.

Entertainment 720 Balance Sheets December 31, 2020 2019 Change Assets Cash 62 52 10 Accounts Receivable 66 75 (9) Less: Allowance for uncollectible accounts (3) (4) 1 Prepaid Expenses 16 20 Inventory 100 120 PP&E 300 240 60 Less: Accumulated Depreciation (114) (105) (9) Total Assets 427 398 29 (20) Liabilities Accounts Payable Interest Payable Notes payable Bonds payable Shareholder's Equity Common stock Retained earnings Total Liabilities & Equity 28 1 40 15 33 2 30 30 (5) (1) 10 (15) 142 201 427 130 173 398 12 28 29

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