Lorna’s Bubble Tea Group provided the 2021 and 2020 comparative Balance sheets and 2021 Income Statement as follow: Lorn
Posted: Wed Jul 06, 2022 6:12 am
Lorna’s Bubble Tea Group provided the 2021 and 2020 comparativeBalance sheets and 2021 Income Statement as follow:
Lorna’sBubble Tea Group
Comparative Balance Sheets
December 31
Increase
2021
2020
(Decrease)
Current assets:
Cash and cash equivalents
$ 17,300
4,000
13,300
Accounts receivable
45,700
44,500
1,200
Inventories
61,400
47,000
14,400
Prepaid expenses
1,800
3,900
(2,100)
Non-current assets:
Land
69,100
22,600
46,500
Equipment, net
53,100
49,500
3,600
Total assets
248,400
171,500
$ 76,900
Current liabilities:
Accounts payable
35,200
$ 26,900
$ 8,300
Salary payable
24,000
13,100
10,900
Other accrued liabilities
22,100
23,700
(1,600)
Long-term liabilities:
Notes payable
51,000
34,000
17,000
Shareholders’ equity:
Share capital, no-par
88,600
65,900
22,700
Retained earnings
27,500
7,900
19,600
Total liabilities and shareholders’ equity
248,400
$ 171,500
$ 76,900
Lorna’sBubble Tea Group
Income Statement
Year Ended December 31, 2021
Sales revenue
$450,000
Less Cost of goods sold
186,900
Gross Profit
263,100
Expenses:
Salary expense
76,300
Depreciation expense
17,900
Other operating expense
49,900
Interest expense
24,200
Income tax expense
29,200
Totalexpenses
197,500
Net income
$65,600
Lorna’s Bubble Tea had no noncash investing and financingtransactions during 2021. During the year, there were no salesof land or equipment, no payment of notes payable, no retirementsof shares, and no treasury shares transactions.
Requirements:
Prepare the 2021 statement of cash flows, formatting operatingactivities by using thedirect method.
Lorna’sBubble Tea Group
Comparative Balance Sheets
December 31
Increase
2021
2020
(Decrease)
Current assets:
Cash and cash equivalents
$ 17,300
4,000
13,300
Accounts receivable
45,700
44,500
1,200
Inventories
61,400
47,000
14,400
Prepaid expenses
1,800
3,900
(2,100)
Non-current assets:
Land
69,100
22,600
46,500
Equipment, net
53,100
49,500
3,600
Total assets
248,400
171,500
$ 76,900
Current liabilities:
Accounts payable
35,200
$ 26,900
$ 8,300
Salary payable
24,000
13,100
10,900
Other accrued liabilities
22,100
23,700
(1,600)
Long-term liabilities:
Notes payable
51,000
34,000
17,000
Shareholders’ equity:
Share capital, no-par
88,600
65,900
22,700
Retained earnings
27,500
7,900
19,600
Total liabilities and shareholders’ equity
248,400
$ 171,500
$ 76,900
Lorna’sBubble Tea Group
Income Statement
Year Ended December 31, 2021
Sales revenue
$450,000
Less Cost of goods sold
186,900
Gross Profit
263,100
Expenses:
Salary expense
76,300
Depreciation expense
17,900
Other operating expense
49,900
Interest expense
24,200
Income tax expense
29,200
Totalexpenses
197,500
Net income
$65,600
Lorna’s Bubble Tea had no noncash investing and financingtransactions during 2021. During the year, there were no salesof land or equipment, no payment of notes payable, no retirementsof shares, and no treasury shares transactions.
Requirements:
Prepare the 2021 statement of cash flows, formatting operatingactivities by using thedirect method.