The Comparative Balance Sheet of ConnieJo Company, for December 31 $\$ 39,000$

question 20

Essay

The comparative balance sheet of ConnieJo Company, for December 31, Years 1 and 2 ended December 31 appears below in condensed form: ​
The income statement for the current year is as follows: ​
Additional data for the current year are as follows: (a) Fully depreci ated equipment costing $\$ 39,000$ was scrapped, no salvage, and equipment was purchased for $\$ 157,000$ .
(b) Bonds payable for $\$ 100,000$ were retired by payment at their face amount.
(c) 5,000 shares of common stock were issued at $\$ 15$ for cash.
(d) Cash dividends declared were paid $\$ 41,400$ .
(e) All sales are on account. ​
Prepare a statement of cash flows, using the direct method of reporting cash flows from operating activities.

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Definitions:

Incidental Beneficiary

An incidental beneficiary is a third party who may benefit from a contract between two other parties, even though the benefits were not directly intended for them.

Privity of Contract

The legal principle that a contract confers rights and imposes obligations only on the parties to the contract, barring any third party from enforcing or interfering with the agreement.

Policy Proceeds

The amount paid out on an insurance policy, typically upon the occurrence of the event insured against.

Uniform Commercial Code

A comprehensive set of laws governing commercial transactions in the United States, designed to harmonize legal standards across states.