P5-3 Preparing a Statement of Cash Flows (Indirect Method) LO5-2, 5-7
The comparative statements of financial position of Mikos Inc. as at December 31, 2020 and 2021 and its statement of earnings for the year ended December 31, 2021 are presented below:
MIKOS INC. Comparative Statements of Financial Position December 31, 2021
Assets
Cash
Short-term investments
Accounts receivable
Inventories, at cost
Prepaid expenses
Land
Property, plant, and equipment, net
2020
$510,200
$518,200
$65,400
$35,600
$74,000
$30,800
$56,400
$41,200
$5,200
$8,400
$49,800
$76,000
$284,800
$185,000
$25,200
$30,400
$571,000
$525,600
Liabilities and Shareholders' Equity
Accounts payable
Accrued liabilities
Long-term notes payable
Contributed capital
Retained earnings
$8,400
$11,200
$122,000
$174,000
$224,000
$66,000
$187,200
$141,000
$571,000
$525,600
MIKOS INC. Statement of Earnings
For the Year Ended December 31, 2021
Sales
Cost of sales
Amortization expense - intangible assets
Depreciation expense - property, plant, and equipment
Operating expenses
$886,000
$442,000
$5,200
$34,200
$233,000
$13,200
$727,600
$158,400
$47,520
$110,880
Income tax expense
Net earnings
Additional information is as follows:
a. Land was sold for cash at its carrying amount.
b. The short-term investments will mature in February 2022.
c. Cash dividends were declared and paid in 2021.
d. New equipment with a cost of $167,200 was purchased for cash, and old equipment was sold at its carrying amount.
e. Long-term notes of $16,000 were paid in cash, and notes of $36,000 were converted to shares.
Required:
1. Prepare a statement of cash flows for Mikos Inc. for the year ended December 31, 2021 using the indirect method. (Negative answers should be indicated by a minus sign.)
MIKOS INC.
Statement of Cash Flows
For the Year Ended December 31, 2021
Cash flows from operating activities
Adjustments to reconcile net earnings to net cash provided by operating activities:
Net cash flow from operating activities
Cash flows from investing activities:
Cash flows from financing activities:
Net cash flow from financing activities
Cash and short-term investments, beginning of year
Cash and short-term investments, end of year
2. This part of the question is not part of your Connect assignment.
3. This part of the question is not part of your Connect assignment.
