Answer to Question #269761 in Accounting for Lex

Question

Aero Inc.

Balance Sheet

December 31, 2019

Cash $20,000

Accounts Receivable 21,200

Investments 32,000

Plant Assets 81,000

Land 40,000

194,200

Accounts Payable $30,000

Bonds Payable 41,000

Common Stock 100,000

Retained Earnings 23,200

$194,200

During 2020, the following occurred.

1. Aero liquidated its available-for-sale debt investment portfolio at a loss of $5,000.

2. A tract of land was purchased for $38,000.

3. An additional $30,000 in common stock was issued at par.

4. Dividends totaling $10,000 were declared and paid to stockholders.

5. Net income for 2020 was $35,000, including $12,000 in depreciation expense.

6. Land was purchased through the issuance of $30,000 in additional bonds.

7. At December 31, 2020, Cash was $70,200, Accounts Receivable was $42,000, and Accounts Payable was $40,000.

a. Prepare a statement of cash flows for the year 2020 for Aero.

b. Prepare the unclassified balance sheet as it would appear at December 31, 2020.

Answer 1

a) Statement of cash flows for the year 2020 for Aero.

b)Unclassified balance sheet as it would appear at December 31, 2020.