Question

Question 10 of 10 -11 Current Attempt in Progress The comparative statement of financial position of Marigold Corporation as at December 31, 2020, follows: MARIGOLD CORPORATION Statement of Financial Position December 31 Assets Cash Accounts receivable Equipment Less: Accumulated depreciation Total Liabilities and Shareholders' Equity Accounts payable Common shares Retained earnings Total December 31 2020 $ 50,000 89.200 27,000 (6,200) $ 160,000 2019 $ 6,800 88,200 21.400 (10.800) $ 105,600 $ 20,000 100,000 40,000 $ 160,000 $ 10,000 78,400 17.200 $ 105.600

Answer 1

Answer:

	2020	2019
Current assets
Cash	$    50000	$    6800
Accounts receivable	$    89200	$ 88200
Total current assets	$ 139200	$ 95000
Current liabilities	$    20000	$ 10000
Current ratio	6.96	9.5
Total debts (Accounts payable)	$    20000	$ 10000
Total assets	$ 160000	$ 105600
Debt to asset ratio	12.50%	9.47%

Cash flow from operating activities	43700
Less: Purchase of fixed assets	17100
Free cash flows December 31, 2020	26600

Working Notes:

Cash flow from operating activities
Net Income		36000
Adjustments to reconcile net income to net cash provided by Operating Activities
Depreciation	2400
Gain on sale of equipment	(3700)
Increase in Accounts Receivable	(1000)
Decrease in Accounts payable	10000
		7700
Net cash provided by Operating Activities		43700

Equipment
Opening balance	21400	Accumulated Depreciation	7000
Bank	17100	Bank	8200
Profit and loss account	3700
		Closing balance	27000
	42200		42200
Accumulated Depreciation- Equipment
Equipment (on equipment sold)	7000	Operating balance	10800
Closing balance	6200	P and L Account	2400
	13200		13200