Question

The comparative balance sheets for jay Park Corporation appear below:

JAY PARK CORPORATION

Comparative Balance Sheet

                                                                                  Dec. 31, 2021                                                                           Dec. 31, 2020

Assets

Cash....................................................................                   $ 23,000.................................................................. $ 12,000

Accounts receivable..............................................         18,000.......................................................... 14,000

Prepaid expenses.................................................         6,000............................................................ 9,000

Inventory..............................................................         27,000.......................................................... 18,000

Long-term investment in bonds.............................               -0-        .................................................................... 18,000

Equipment............................................................         60,000.......................................................... 30,000

Accumulated depreciation—equipment..................                     (18,000)...............................................................        (14,000)

        Total assets..................................................                   $ 116,000................................................................ $ 87,000

Liabilities and Shareholders' Equity

Accounts payable.................................................                   $ 21,000.................................................................. $ 9,000

Bonds payable......................................................         37,000.......................................................... 45,000

Common shares...................................................         40,000.......................................................... 23,000

Retained earnings................................................                         18,000.................................................................. 10,000

        Total liabilities and shareholders' equity.........                   $ 116,000................................................................ $ 87,000

Additional information:

1.   Profit for the year ending December 31, 2021 was $ 20,000.

2.   Cash dividends of $ 12,000 were declared and paid during the year.

3. Long-term investments in bonds that had an amortized cost of $ 18,000 were sold for $ 16,000.

Required:

Prepare a cash flow statement for the year ended December 31, 2021, using the indirect method.

Answer 1

JAY PARK CORPORATION Statement of Cash flows For the Year Ended December 31,2021 Cash flows from Operating Activities: Profit Adjustments to Profit Depreciation expenses Loss on sale of Investment Increase in Accounts Receivables Increase in Inventory Decrease in Prepaid Expenses Increase in Accounts Payable $ 20,000 $ 4,000 2,000 (4,000) (9,000) 3,000 12,000 $ $ $ 8,000 |Net Cash Provided by Operating Activities Cash Flows from Investing Activities Sale of Investment Purchase of equipment |Net Cash used by investing activities Cash Flows from Financing Activities Issuance of common stock Payment of cash đividends Redemption of Bonds |Net Cash Used by financing activities Net Increase in Cash Cash at beginning of period Cash at End of Period $ 28,000 $ 16,000 (30,000) (14,000) $ 17,000 (12,000) $ (8,000) (3,000) $ 11,000 12,000 $ 23,000 GA A e