The income statement, balance sheets, and additional information for Great Adventures, Inc., are provided below.
GREAT ADVENTURES, INC.
Income Statement
For the Year Ended December 31, 2020 |
| Revenues: |
|
|
| Service revenue (clinic, racing, TEAM) |
$ 545,000 |
|
| Sales revenue (MU watches) |
120,000 |
|
| |
|
| Total revenues |
|
$ 665,000 |
| Expenses: |
|
|
| Cost of goods sold (watches) |
71,000 |
|
| Operating expenses |
304,376 |
|
| Depreciation expense |
51,000 |
|
| Interest expense |
29,824 |
|
| Income tax expense |
57,600 |
|
| |
|
| Total expenses |
|
513,800 |
| |
|
| Net income |
|
$ 151,200 |
| |
|
GREAT ADVENTURES, INC.
Balance Sheets
December 31, 2020 and 2019 |
| |
2020 |
|
2019 |
|
Increase (I)
or
Decrease (D) |
| Assets |
|
|
|
|
|
|
|
|
|
| Current assets: |
|
|
|
|
|
|
|
|
|
| Cash |
$ |
325,094 |
|
$ |
139,000 |
|
$ |
186,094 |
(I) |
| Accounts receivable |
|
46,500 |
|
|
36,000 |
|
|
10,500 |
(I) |
| Inventory |
|
17,150 |
|
|
14,100 |
|
|
3,050 |
(I) |
| Other current assets |
|
13,150 |
|
|
11,100 |
|
|
2,050 |
(I) |
| Long-term assets: |
|
|
|
|
|
|
|
|
|
| Land |
|
400,000 |
|
|
0 |
|
|
400,000 |
(I) |
| Buildings |
|
1,100,000 |
|
|
0 |
|
|
1,100,000 |
(I) |
| Equipment |
|
66,000 |
|
|
66,000 |
|
|
|
|
| Accumulated depreciation |
|
(76,500) |
|
|
(25,500) |
|
|
51,000 |
(I) |
| |
|
|
|
|
|
| Total assets |
$ |
1,891,394 |
|
$ |
240,700 |
|
|
|
|
| |
|
|
|
|
|
| Liabilities and Stockholders' Equity |
|
|
|
|
|
|
|
|
|
| Current liabilities: |
|
|
|
|
|
|
|
|
|
| Accounts payable |
$ |
12,150 |
|
$ |
9,100 |
|
$ |
3,050 |
(I) |
| Interest payable |
|
760 |
|
|
760 |
|
|
|
|
| Income tax payable |
|
57,600 |
|
|
38,500 |
|
|
19,100 |
(I) |
| Long-term liabilities: |
|
|
|
|
|
|
|
|
|
| Notes payable |
|
502,844 |
|
|
30,500 |
|
|
472,344 |
(I) |
| Stockholders' Equity: |
|
|
|
|
|
|
|
|
|
| Common stock |
|
125,000 |
|
|
25,000 |
|
|
100,000 |
(I) |
| Paid-in capital |
|
1,105,000 |
|
|
0 |
|
|
1,105,000 |
(I) |
| Retained earnings |
|
168,040 |
|
|
136,840 |
|
|
31,200 |
(I) |
| Treasury stock |
|
(80,000) |
|
|
0 |
|
|
(80,000) |
(I) |
| |
|
|
|
|
|
| Total liabilities and stockholders' equity |
$ |
1,891,394 |
|
$ |
240,700 |
|
|
|
|
| |
|
|
|
|
|
Additional Information for 2020:
1. Borrowed $510,000 in January 2020. Made 12 monthly payments during the year, reducing the balance of the loan by $37,656.
2. Issued common stock for $1,200,000.
3. Purchased 10,000 shares of treasury stock for $16 per share.
4. Reissued 5,000 shares of treasury stock at $17 per share.
5. Declared and paid a cash dividend of $120,000.
Required:
Prepare the statement of cash flows for the year ended December 31, 2020, using the indirect method. (List cash outflows as negative amounts.)