Scenario: 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. Maple Group Ltd Comparative Balance Sheet December 31, 2020 and 2019 2020 2019 Increase/(Decrease) Assets Cash and cash equivalent ? 25,900 (10,600) Accounts Receivable 43,200 39,000 ? Inventories 93,700 ? (46,200) Fixed Assets, net 251,600 ? ? Total Assets 403,800 415,100 (11,300) Liabilities Accounts payable 26,600 21,000 ? Accrued liabilities 22,800 ? (1,300) Long-term notes payable ? 65,000 ? Stockholders' Equity: Common Stock ? ? 1,400 Retained earnings 161,000 175,000 (14,000) Treasury stock - Total liabilities and stockholders' equity 403,800 415,100 (11,300) - - - Maple Group Ltd Income Statement Year Ended December 31,2020 Revenues and gains: Sales revenue 375,000 Interest revenue 11,800 Total revenues and gains 386,800 Expenses Cost of goods sold 205,500 Depreciation expense 15,500 Other operating expense 126,000 Interest expense 24,300 Total expenses 371,300 Income before income taxes 15,500 Income tax expense 16,300 Net Loss (800) Notes Acquisition of fixed asset during 2020 56,800 Sale proceed from sale of plant asset - Receipt for issuance of notes payable - Payment for note payable 3,000 Dividend paid 13,200 Book value of equipment sold - Maple Group Ltd Income Statement Year Ended December 31,2020 Revenues and gains: Sales revenue 375,000 Interest revenue 11,800 Total revenues and gains 386,800 Expenses Cost of goods sold 205,500 Depreciation expense 15,500 Other operating expense 126,000 Interest expense 24,300 Total expenses 371,300 Income before income taxes 15,500 Income tax expense 16,300 Net Loss (800) Notes Acquisition of fixed asset during 2020 56,800 Sale proceed from sale of plant asset - Receipt for issuance of notes payable - Payment for note payable 3,000 Dividend paid 13,200 Book value of equipment sold - Requirements 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 using the information given and 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 using the information given.

Scenario: 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...

Scenario:

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.

Maple Group Ltd
Comparative Balance Sheet
December 31, 2020 and 2019
	2020	2019	Increase/(Decrease)
Assets
Cash and cash equivalent	?	25,900	(10,600)
Accounts Receivable	43,200	39,000	?
Inventories	93,700	?	(46,200)
Fixed Assets, net	251,600	?	?
Total Assets	403,800	415,100	(11,300)
Liabilities
Accounts payable	26,600	21,000	?
Accrued liabilities	22,800	?	(1,300)
Long-term notes payable	?	65,000	?
Stockholders' Equity:
Common Stock	?	?	1,400
Retained earnings	161,000	175,000	(14,000)
Treasury stock			-
Total liabilities and stockholders' equity	403,800	415,100	(11,300)
	-	-	-

Maple Group Ltd
Income Statement
Year Ended December 31,2020
Revenues and gains:
Sales revenue	375,000
Interest revenue	11,800
Total revenues and gains		386,800
Expenses
Cost of goods sold	205,500
Depreciation expense	15,500
Other operating expense	126,000
Interest expense	24,300
Total expenses		371,300
Income before income taxes		15,500
Income tax expense		16,300
Net Loss		(800)

Notes
Acquisition of fixed asset during 2020		56,800
Sale proceed from sale of plant asset		-
Receipt for issuance of notes payable		-
Payment for note payable		3,000
Dividend paid		13,200
Book value of equipment sold		-

Maple Group Ltd
Income Statement
Year Ended December 31,2020
Revenues and gains:
Sales revenue	375,000
Interest revenue	11,800
Total revenues and gains		386,800
Expenses
Cost of goods sold	205,500
Depreciation expense	15,500
Other operating expense	126,000
Interest expense	24,300
Total expenses		371,300
Income before income taxes		15,500
Income tax expense		16,300
Net Loss		(800)

Notes
Acquisition of fixed asset during 2020		56,800
Sale proceed from sale of plant asset		-
Receipt for issuance of notes payable		-
Payment for note payable		3,000
Dividend paid		13,200
Book value of equipment sold		-

Requirements

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 using the information given and 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 using the information given.

Jun 09, 2022

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Scenario: 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...

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