Question

The chief accountant for Grandview Corporation provides you with the company's 2021 statement of cash flows and income statement. The accountant has asked for your help with some missing figures in the company's comparative balance sheets. These financial statements are shown next ($ in millions), $ 101 (40) (26) (17) GRANDVIEW CORPORATION Statement of Cash Flows For the Year Ended December 31, 2021 Cash Flows from Operating Activities: Collections from customers Payment to suppliers Payment of general & administrative expenses Payment of income taxes Net cash flows from operating activities Cash Flows from Investing Activities: Sale of investments Cash Flows from Financing Activities: Issuance of common stock Payment of dividends Net cash flows from financing activities Not increase in cash $ 18 73 13 10 $ 101 $ 112 40 72 GRANDVIEW CORPORATION Income Statement For the Year Ended December 31, 2021 Sales revenue Cost of goods sold Gross profit Operating expenses General and administrative expense $ 26 Depreciation expense 18 Total operating expenses Operating income Other income: 44 28

Answer 1

a. Calculate missing figures in Assets b. Calculate missing figures in Liabilities: Cash balance of 2020 Income taxes payable 2020 = Income taxes payable 2021+Income taxes paid - Income tax expenses Cash balance of 2021 - Increase in Cash =30+17-10 =167-101 =37 =66 Retained Earnings 2021 = retained earnings 2020+Net Income-Dividend Accounts Receivable-2021 =36+36-3 Accounts Receivable-2020+Credit Sales-Cash collections =69 =92+112-101 =103 Total liabilities & stockholder's Equity 2021 2020 Purchases: Accounts payable $ 48 $ 38 Accounts Payble -2021=Accounts Payable-2020-Cash paid+Purchases Payables for selling& admini expenses $ 17 $ 17 Purchases=Accounts Payable 2021+Cash paid-Accounts Payable 2020 Income taxes payable $ 30 $ 37 =48+40-38 Common stock $ 251 $ 238 =50 Retained Earnings $ 69 $ 36 Cost of good sold = Inventory 2020+purchase-Inventory 2021 Total $ 415 $ 366 Inventory 2020 = cost of good sold+Inventory 2021-purchases =40+68-50 =58 Accumulated Depreciation 2020 Accumulated Depreciation 2020 =Accumulated Depreciation 2021-Depreciation Expenses =81-18 =63 $ Total Assets Cash Accounts Receivable Investments Inventory Property, plant & Equipment Less:Accumulated Depreciation Total 2021 2020 $ 167 $ 66 $ 103 $ 92 $ 55 $ 68 $ 58 $ 158 $ 158 $ -81 $ -63 $ 415 $ 366

36 18 -18 Balance sheet 2021 2020 Assets Cash $ 167 $ 66 Accounts Receivable $ 103 $ 92 Investments $ - $ 55 Inventory $ 68 $ 58 Property, plant & Equipment $ 158 $ 158 Less:Accumulated Depreciation $ -81 $ -63 Total $415 $366 Total liabilities & stockholder's Equity Accounts payable $ 48$ 38 Payables for selling& admini expenses $ 17 $ 17 Income taxes payable $ 30$ 37 Common stock $ 251 $ 238 Retained Earnings $ 69 $ 36 Total $415 S366 Cash flows from Operating activities: Net Income $ Adjustments for non cash effects: Depreciation Expenses $ Gain on sale of investments $ Changes in operating assets and liabilities Increases in Accounts Receivable $ Increase in Inventory $ Increase in Accounts Payable $ Decrease in Income taxes payable Net cash flow from operating activities $ -11 -10 10 18