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Author Question: Wil Wheaton, Kirk Enterprises' controller, is preparing the financial statements for 2021 as ... (Read 19 times)

zl00505

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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, net287,200269,700
Inventory125,00095,000
Total current assets534,500445,200
Property, plant, & equipment, net297,000160,000
Accumulated depreciation 90,00060,000
  Net property, plant, & equipment207,000100,000
Total Assets$741,500 $545,200
Accounts payable$150,000$175,000
Taxes payable17,60020,000
Mortgage payable110,000             0
  Total liabilities277,600195,000
Common stock350,000290,000
Retained earnings113,90060,200
  Total stockholders' equity463,900350,200
Total liabilities & stockholders' equity$741,500 $545,200


Kirk Enterprises
Income Statement
For the Year Ended December 31, 2021
Sales revenue$1,070,000
Cost of goods sold700,000
Operating expenses
  Depreciation expense$  42,000
  Interest expense7,400
  Wages expenses175,000
  Other expenses   16,000   240,400
Income before taxes129,600
Loss on equipment sale3,000
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 direct method, prepare Kirk Enterprises' statement of cash flows for 2021.
Managerial Accounting ¦ Davis ¦ 4th Edition
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Marked as best answer by zl00505 on Feb 5, 2023

rhhoagland

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Reply #1 on: Feb 5, 2023
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zl00505

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Reply 2 on: Feb 5, 2023
YES! Correct, THANKS for helping me on my review

dreamfighter72

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Reply 3 on: Yesterday
Great answer, keep it coming :)

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