Rays Real Estate Company wants to do investment inRise

Rays Real Estate Company wants to do investment inRise Corporation. As an analyst and accountant of Rays you have to represent cash flow statement of the Rise Corporation

Rise Corporation Additional Information:

Net income for the year 2020 amounted to $350,000. Net sales are $1,100,000, dividends revenue are $10,000, interest revenue is $9,000, Cost of goods sold are $292,000, operating expenses are 320,000 including depreciation expense of $60,000 and amortization of $30,000, interest expense is $119,000 and tax expense is $136,000.

Purchased $460,000 in plant assets, paying $460,000 cash. Plant asset sold for $413,000 with a book value of $311,000.Moreover, Market securities account shows debit entries of $465,000 representing the cost of securities purchased. Furthermore, Notes Receivable accounts shows $417,000 in debt entries represent cash loaned by Rise Corporation to borrower during the year and $515,000 in credit entry represents collections of notes receivable.During the year, Rise Corporation borrowed $719,000 cash by issuing short term notes payable to banks. Also, the company repaid $817,000 in principle amount due on these loans. The company issued 4,000 shares of $20 par value capital stock for cash at a price of $117 per share as well as market securities costing $340,000 were sold for $433,000

RISE CORPORATION COMPARITIVE BALANCE SHEETS DECEMBER 31, 2020 AND 2019

20202019

Current Assets: 2020 2019

Cash and Cash Equivalent $ 960,000 $437,000

Marketable Securities 463,000 853,000

Notes Receivable 211,000 330,000

Accounts Receivable 571,000 353,000

Accrued Interest Receivable 533,000 639,000

Inventory 589,000 463,000

Prepaid Salaries 53,000 45,000

Prepaid Expenses 64,000 117,000

Total Current Assets $3,444,000 $3,237,000

Non Current Assets:

Plant and Equipment 829,000 600,000

(net of accumulated depreciation)

Total Assets $4,273,000 $3,837,000

Liabilities and Stockholders’ Equity

Current liabilities:

Notes Payable (Short Term) $819,000 $ 717,000

Accounts Payable 456,000 337,000

Interest Payable 257,000 334,000

Income Taxes Payable 223,000 165,000

Other Accrued Expenses payable 165,000 233,000

Total Current Liabilities $1,920,000 $1,786,000

Non Current Liabilities:

Notes Payable (Long term) 140,000 0

Bonds Payable 900,000800,000

Total Liabilities $2,960,000 $2,586,000

Stockholders’ Equity:

Capital Stock $520,000 $400,000

Additional Paid-in-Capital 150,000 100,000

Retained Earnings 643,000751,000

Total Stockholders’ Equity $1,313,000$1,251,000

Total Liabilities and Equity $4,430,000 $3,837,000

1. Prepare Cash flow statement of Rise Corporation using Indirect Method.
2. Illustrate your findings in your own wording in minimum of 80 words for each activities found on answer a and maximum of 100 words.