Answer Happy

E23.13 (L02,3) (SCF-Direct Method) Andrews AG, a greeting card company, had the follow statements prepared as of December 31, 2019. Andrews AG Comparative Statement of Financial Position As of December 31, 2019 and 2018 12/31/19 12/31/18 €154,000 €130,000 Equipment Accumulated dept-equipment (35,000) (25.000) 46,000 Copyrights 50,000 40,000 60,000 Inventory Prepaid rent. 5,000 4,000 Accounts receivable 62,000 49,000 Short-term investments (trading) 35,000 18,000 Cash 6,000 9,000 Total assets €313,000 €295.000 Share capital-ordinary, €10 par €100,000 €100,000 30,000 30,000 Share premium-ordinary Retained earnings 57,000 36,000 60,000 67.000 Long-term loans payable Accounts payable Income taxes payable 46,000 42,000 4,000 6,000 Salaries and wages payable 8,000 4,000 Short-term loans payable 8,000 10,000 Total equity and liabilities €313,000 €295,000 Andrews AG Income Statement For the Year Ending December 31, 2019 Sales revenue €338,150 Cost of goods sold 175,000 Gross margin 163,150 Operating expenses 120,000 Operating income 43,150 Interest expense €11,400 Gain on sale of equipment 2,000 9,400 Income before tax Income tax expense Net income 33,750 6,750 € 27,000 Additional information: 1. Dividends in the amount of €6,000 were declared and paid during 2019. 2. Depreciation expense and amortization expense are included in operating expenses 3. No unrealized gains or losses have occurred on the investments during the year. 4. Equipment that had a cost of €30,000 and was 70% depreciated was sold during 2019.