The 2020 comparative balance sheet and 2020 income statement of Maple Group Ltd, have just been prepare and presented to the owners by the company’s Accountant. Upon close examination of the financial information received, it was discovered that some figures in the balance sheet were erroneously omitted due to an oversight by the accountant who is not available to fix the problem due to his unavoidable absence from work. In addition, the owners were concerned about the movement in the company’s cash and cash equivalent given that the balance sheet does not show or explain the reason or reasons why there was an increase or decrease in this area. The company uses the indirect method to prepare the statement of cash flows and it is expected that this should be able to provide the needed clarity required by the owners. 1. How can the owners use the cash flow information or what can the statement of cash flows helps the owners to do? 2. Reconstruct the company’s comparative balance sheet for 2019/2020 compute and show the missing figures to include the appropriate sign as a positive or negative figure. 3. Prepare a complete statement of cash flows for 2020 using the indirect method.
The 2020 comparative balance sheet and 2020 income statement of Maple Group Ltd, have just been prepare and presented to the owners by the company’s Accountant. Upon close examination of the financial information received, it was discovered that some figures in the balance sheet were erroneously omitted due to an oversight by the accountant who is not available to fix the problem due to his unavoidable absence from work. In addition, the owners were concerned about the movement in the company’s cash and cash equivalent given that the balance sheet does not show or explain the reason or reasons why there was an increase or decrease in this area. The company uses the indirect method to prepare the statement of cash flows and it is expected that this should be able to provide the needed clarity required by the owners. 1. How can the owners use the cash flow information or what can the statement of cash flows helps the owners to do? 2. Reconstruct the company’s comparative balance sheet for 2019/2020 compute and show the missing figures to include the appropriate sign as a positive or negative figure. 3. Prepare a complete statement of cash flows for 2020 using the indirect method.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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The 2020 comparative balance sheet and 2020 income statement of Maple Group Ltd, have just been prepare and presented to the owners by the company’s Accountant. Upon close examination of the financial information received, it was discovered that some figures in the balance sheet were erroneously omitted due to an oversight by the accountant who is not available to fix the problem due to his unavoidable absence from work. In addition, the owners were concerned about the movement in the company’s cash and cash equivalent given that the balance sheet does not show or explain the reason or reasons why there was an increase or decrease in this area. The company uses the indirect method to prepare the statement of cash flows and it is expected that this should be able to provide the needed clarity required by the owners.
1. How can the owners use the cash flow information or what can the statement of cash flows helps the owners to do?
2. Reconstruct the company’s comparative balance sheet for 2019/2020 compute and show the missing figures to include the appropriate sign as a positive or negative figure.
3. Prepare a complete statement of cash flows for 2020 using the indirect method.
Transcribed Image Text:Maple Group Ltd
Comparative Balance Sheet
December 31, 2020 and 2019
2020
2019 Increase/(Decrease)
Assets
64,990
95,100
72,500
Cash and cash equivalent
61,895
88,500
79,855
Accounts Receivable
Inventories
Fixed Assets, net
Total Assets
?
?
442,590
395,800
46,790
Liabilities
Accounts payable
45,000
58,350
Accrued liabilities
?
Long-term notes payable
Stockholders' Equity:
Common Stock
Retained earnings
Total liabilities and stockholders' equity
99,500
128,550
143,050
105,110
24,290
395,800
37,940
43,540
19,250
442,590
46,790
Maple Group Ltd
Income Statement
Year Ended December 31,2020
Revenues and gains:
Sales revenue
499,000
Interest revenue
11,800
510,800
Total revenues and gains
Expenses
Cost of goods sold
Depreciation expense
205,500
28,500
126,000
24,300
Other operating expense
Interest expense
Total expenses
Income before income taxes
Income tax expense
Net Income
384,300
126,500
16,300
110,200
Notes
Acquisition of fixed asset during 2020
72,950
Sale proceed from sale of plant asset
Receipt for issuance of notes payable
Payment for note payable
Dividend paid
Book value of equipment sold
29,050
90,950
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