ACC371 Spring 2021 Name _________________________
Below is an optional assignment. You may work with others currently enrolled in ACC371. However, you are not to use outside sources such as classmates not enrolled in ACC371, CPAs, Google, Wiley’s solution manual, Chegg, etc. Each student must submit their own solution.
To earn up to 10 points the solution must be correct. No points are awarded for partial credit. You earn 5 points for the correct solution to “cash generated(used) by operating activities” and another 5 points for the final correct solution (which includes the investing and financing sections along with ending cash for 2021).
*(SCF- Indirect Method and Balance Sheet) Jobim Inc. had the following condensed balance sheet at the end of operations for 2020.
|Jobim INC.Balance SheetDecember 31, 2020|
|Cash||$ 8,500||Accounts Payable||$ 15,000|
|Accounts Receivable||29,000||Long-term notes payable||25,500|
|Plant assets (net)||67,500||Capital stock||75,000|
During 2021, the following occurred.
A tract of land was purchased for $9,000.
Bonds payable in the amount of $15,000 were redeemed at par.
An additional $10,000 in capital stock was issued at par.
Dividends totaling $9,375 were paid to stockholders.
Net income was $35,250 after allowing depreciation of $13,500.
Land was purchased through the issuance of $22,500 in bonds.
Jobim Inc. sold part of its investment portfolio for $12,875. This transaction resulted in a gain of $2,000 for the company. The company classifies the investments as available-for-sale.
The ending balance for various accounts as of 12/31/21 were: Accounts Receivable 35,000, Accounts Payable $12,000, LT Notes Payable $31,000, and Cash 41,250.
*adapted from Kieso, D., Weygandt, J. J., & Warfield, T. (2013). Intermediate Accounting (15th ed.). John Wiley & Sons, Inc.: Hoboken, NJ.
Prepare a proper statement of cash flows for 2021 using the indirect method.