The following information is taken from Smith Corporation's financial statements: December 31 2020 2019 Cash $100,000 $ 27,000 Accounts receivable 95,000 80,000 Allowance for doubtful...

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Accounting

The following information is taken from Smith Corporation'sfinancial statements:
December 31
2020   2019
Cash
$100,000
$ 27,000
Accounts receivable
95,000
80,000
Allowance for doubtful accounts
(4,500)
       (3,100)
Inventory
145,000
175,000
Prepaid expenses
7,500
6,800
Land
100,000
60,000
Buildings
287,000
244,000
Accumulated depreciation
(35,000)
  (13,000)
Patents
    20,000
————————
      $715,000
     35,000
————————
  $611,700
Accounts payable
$ 90,000
$ 84,000
Accrued liabilities
54,000
63,000
Bonds payable
135,000
60,000
Common stock
100,000
100,000
Retained earnings——appropriated
80,000
10,000
Retained earnings——unappropriated
271,000
302,700
Treasury stock, at cost
(15,000)
---———
$715,000
(8,000)
-————
$611,700
For 2020 Year
—————————————
Netincome                  $63,300
Depreciationexpense              22,000
Amortization ofpatents             5,000
Cash dividends declared and paid       25,000
Gain or loss on sale ofpatents         none
INSTRUCTIONS
Prepare a statement of cash flows for Smith Corporation for theyear 2020. (Use the indirect method.)

Answer & Explanation Solved by verified expert

3.7 Ratings (573 Votes)

Smith Corporation Statement of Cash Flows For the year ended December 31 2020 Particulars Amount Cash Flows from Operating Activities Net Income 63300 Adjustments to reconcile net See Answer

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Cash	$100,000	$ 27,000
Accounts receivable	95,000	80,000
Allowance for doubtful accounts	(4,500)	(3,100)
Inventory	145,000	175,000
Prepaid expenses	7,500	6,800
Land	100,000	60,000
Buildings	287,000	244,000
Accumulated depreciation	(35,000)	(13,000)
Patents	20,000 ———————— $715,000	35,000 ———————— $611,700
Accounts payable	$ 90,000	$ 84,000
Accrued liabilities	54,000	63,000
Bonds payable	135,000	60,000
Common stock	100,000	100,000
Retained earnings——appropriated	80,000	10,000
Retained earnings——unappropriated	271,000	302,700
Treasury stock, at cost	(15,000) ---——— $715,000	(8,000) -———— $611,700