Author Question: Wil Wheaton, Kirk Enterprises' controller, is preparing the financial statements for 2021 as ... (Read 53 times)

ahunt13 · **on:** Feb 5, 2023

Wil Wheaton, Kirk Enterprises' controller, is preparing the financial statements for 2021 as follows.

Kirk Enterprises

Comparative Balance Sheets

As of December 31

2021

2020

Cash

$122,300

$80,500

Accounts receivable, net

287,200

269,700

Inventory

125,000

95,000

Total current assets

534,500

445,200

Property, plant, & equipment, net

297,000

160,000

Accumulated depreciation

90,000

60,000

Net property, plant, & equipment

207,000

100,000

Total Assets

$741,500

$545,200

Accounts payable

$150,000

$175,000

Taxes payable

17,600

20,000

Mortgage payable

110,000

0

Total liabilities

277,600

195,000

Common stock

350,000

290,000

Retained earnings

113,900

60,200

Total stockholders' equity

463,900

350,200

Total liabilities & stockholders' equity

$741,500

$545,200

Kirk Enterprises

Income Statement

For the Year Ended December 31, 2021

Sales revenue

$1,070,000

Cost of goods sold

700,000

Operating expenses

Depreciation expense

$ 42,000

Interest expense

7,400

Wages expenses

175,000

Other expenses

16,000

240,400

Income before taxes

129,600

Loss on equipment sale

3,000

Tax expense

63,400

Net income

$ 63,200

He has gathered this additional information:

•	On December 31, 2021, Kirk sold a piece of equipment with an original cost of

$25,000
for $10,000 cash. The equipment had a book value of $13,000.

•	On February 1, 2021, Kirk issued $60,000 of common stock to raise cash in

anticipation
of the purchase of a new building later in the year.

•	On February 2, 2021, Kirk took out a ten-year $110,000 long-term loan to provide the

remaining funds needed to purchase the building.

•	On May 15, 2021, Kirk paid $162,000 for the new building.

•	The company paid a cash dividend of $9,500.

Required:
Using the indirect method, prepare Kirk Enterprises' statement of cash flows for 2021.

kyledifference · **Reply #1 on:** Feb 5, 2023

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