ABC Company has just completed the December 31, 2001, financial statements except for the Statement of Cash Flows. Information on changes in accounts appears in tabular format below. Additional information for 2001:
a. Net income, $16,000.
b. Depreciation expense, $5,000.
c. Cash dividend declared and paid, $4,000.
d. Declared and issued a $10,000 stock dividend, recorded at par.
e. December 30, 2001, purchased a machine (a capital asset) for $10,000; paid half cash and issued a one year, 18%, interest-bearing note of $5,000 for the balance.
f. Sold 20 shares of unissued shares at $26 per share, collected cash in full.
g. Repurchased 10 shares of their ABC shares at $25 per share (assume the single-transaction method is used for common stock), paid cash in full.
h. Purchased a tract of land and paid for it in full by exchanging for it all of the investment in X Corporation shares. The shares were quoted on the market at $12,000 (any gain or loss is included in income as an "ordinary" item).
i. Sold an idle plant for $6,000 cash.
j. Extraordinary gain of $2,000 (net of income tax) due to an earthquake (infrequent and unusual), which caused the loss of capital assets that originally cost $12,000 when they were two-thirds, depreciated; received $6,000 cash settlement from the insurance company. $\begin{array}{|l|l|l|l|l|}
\hline \text { Debits } & \text { Balance } & & & \text { Balance } \
\hline & \mathbf{1 2 - 3 1 - 2 0 0 0} & \text { Debit } & \text { Credit } & \mathbf{1 2 - 3 1 - 2 0 0 1} \
\hline \text { Cash } & & \$ 31,000 & & \$ 58,770 \\hline \text { Accounts receivable (net) } & &14,000 & & 12,000 \
\hline \text { Inventory } && 40,000 & & 43,000 \
\hline \text { LT investment, stock of X Corp. (at cost) } && 12,000 & & 0 \\hline \text { Capital assets (cost) } & & 70,000 & & 68,000 \
\hline \text { Idle plant (at cost) } & & 85,000 & & 0 \
\hline \text { Land } & & & & 12,000 \\hline \text { Common stock (at cost) } & & & & 250 \
\hline \text { Total } & & \$ 252,000 & \$ 194,020 & \
\hline
\end{array}$

Question

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The Answer of ABC Company has just completed the December 31, 2001, financial statements except for the Statement of Cash Flows. Information on changes in accounts appears in tabular format below. Additional information for 2001:
a. Net income, $16,000.
b. Depreciation expense, $5,000.
c. Cash dividend declared and paid, $4,000.
d. Declared and issued a $10,000 stock dividend, recorded at par.
e. December 30, 2001, purchased a machine (a capital asset) for $10,000; paid half cash and issued a one year, 18%, interest-bearing note of $5,000 for the balance.
f. Sold 20 shares of unissued shares at $26 per share, collected cash in full.
g. Repurchased 10 shares of their ABC shares at $25 per share (assume the single-transaction method is used for common stock), paid cash in full.
h. Purchased a tract of land and paid for it in full by exchanging for it all of the investment in X Corporation shares. The shares were quoted on the market at $12,000 (any gain or loss is included in income as an "ordinary" item).
i. Sold an idle plant for $6,000 cash.
j. Extraordinary gain of $2,000 (net of income tax) due to an earthquake (infrequent and unusual), which caused the loss of capital assets that originally cost $12,000 when they were two-thirds, depreciated; received $6,000 cash settlement from the insurance company. $\begin{array}{|l|l|l|l|l|}
\hline \text { Debits } & \text { Balance } & & & \text { Balance } \
\hline & \mathbf{1 2 - 3 1 - 2 0 0 0} & \text { Debit } & \text { Credit } & \mathbf{1 2 - 3 1 - 2 0 0 1} \
\hline \text { Cash } & & \$ 31,000 & & \$ 58,770 \\hline \text { Accounts receivable (net) } & &14,000 & & 12,000 \
\hline \text { Inventory } && 40,000 & & 43,000 \
\hline \text { LT investment, stock of X Corp. (at cost) } && 12,000 & & 0 \\hline \text { Capital assets (cost) } & & 70,000 & & 68,000 \
\hline \text { Idle plant (at cost) } & & 85,000 & & 0 \
\hline \text { Land } & & & & 12,000 \\hline \text { Common stock (at cost) } & & & & 250 \
\hline \text { Total } & & \$ 252,000 & \$ 194,020 & \
\hline
\end{array}$

ABC Company Has Just Completed the December 31, 2001, Financial