Question

Hello, Looking for help on the balance sheet and statement of cash flows.

1. Financial Statements: Develop an Income Statement for 20XX, Cash Flow Statement for 20XX, and Balance Sheet as of the end of 20XX based on the data provided below for year 20XX. All sales are collected when the sale is made and all expenses are paid when the expense is incurred. Explain the purpose of each financial statement. a. Income Statement Data for 20XX: Units produced and sold = 420 • Sales ($80 per unit selling price) = $33600 • Cost of goods sold ($30 per unit, all variable costs) = $12600 • Labor = $0 (Mr. and Mr. Lee were the only ones working and did not pay themselves) • Advertising fees =$2000 • Bank fees = $150 • Phone/internet = $1200 • Shipping ($3 per unit) = $1260 • Utilities = $900 • Office supplies = $800 . Interest expense on note payable = $350 • Depreciation expense (straight line) = $800 • Income tax rate = 26% b. Other Financial Data for 20XX: • Proceeds from sale of equipment = $3000. The equipment originally cost $1000 and had accumulated depreciation of $200. • Purchase of equipment = $1600 (The machine is purchased on the last day of 20XX so no depreciation expense is recorded.) • Repayment of note payable = $5000 • Consider any data relevant from the income statement. C. Balance Sheet Data for Beginning of 20XX: • Cash and cash equivalents = $10000 • Accounts receivable = $0 (Cash is received at time of sale) • Raw materials inventory = $10500 • Equipment = $5000 (This includes the $1000 cost of the equipment sold in 20XX). • Accumulated depreciation = $1,000 (This includes the accumulated depreciation of 200 for the equipment sold in 20XX. • Accounts payable = $0 (Cash is paid at the time of purchase.) • Note payable = $5000 (This is the note payable which is repaid in 20XX) • Common stock = $15000 • Retained earnings = $4500

Answer 1

Answer is given below with all working

if you need any help further please do comment

Statement of Cash flows For the year ended December 31, 20XX Working notes: Amount $11,648 Depre $200 opening balance Bank Account Profit and Loss A/C Equipment Account $5,000 Accumulated Depre $1,600 Bank $2,200 closing balance $3,000 $5,600 $800 ($2,200) $8,800 $8,800 Cash flows from Operating Activities Net Income Add Back Depreciation and Amortisation Profit on sale of Equipment Changes in Working Capital Decrease (Increase) in Inventory Decrease (Increase) in Accounts Receivable Increase (Decrease) in Accounts Payable Increase (Decrease) in Income tax payable Net Cash provided by Operating Activities Cash flows from Investing Activities Purchase of Equipment Sale of Fixed Asset (Equipment) Net Cash Used in Investing Activities Cash flows from Financing Activities Repayment of Debt Net Cash Provided by Financing Activities Net increase in cash during the year Opening balance of cash Closing balance of cash $4,092 $14,340 $1,000 $800 Accumulated Depreciation- Equipment Accumulated Depre $200 Opening Balance P and L Account Closing balance $1,600 (Depreciation during the year) $1,800 ($1,600) $3,000 $1,400 $1,800 Retained Earnings Opening Balance P and L Account $16,148 (Net Income) $16,148 ($5,000) ($5,000) $10,740 $10,000 $20,740 $4,500 $11,648 Closing balance $16,148

Prior Year End Current Year End Assets Current Assets Cash and Cash equivalents Accounts Receivable Inventories Total Current Assets Balance Sheet Current Prior Year Year End | End Liabilities Current Liabilities $10,000 $20,740 Accounts Payable Note Payable $10,500 $10,500 Income Taxes payable $20,500 $31,240 Total Current Liabilities $5,000 $4,092 $4,092 $5,000 Fixed Assets Property Plant and Equipment Minus- Accumulated Depreciation Total Fixed Assets Long Term Liabilities Total Non current Liabilities $5,000 $5,600 $1,000 $1,600 Equity $4,000 $4,000 Common Stock Retained Earnings Total Equity $15,000 $4,500 $19,500 $15,000 $16,148 $31,148 Total Assets $24,500 $35,240 Total Liabilities and Equity | $24,500 $35,240