Preparing a statement of cash flows. (Adapted from a problem prepared by Stephen A. Zeff.) Selected information from the accounting records of Breda Enter- prises Inc. appears below. The firm uses a calendar year as its reporting period. You are asked to prepare a statement of cash flows for Breda Enterprises Inc. for Year 6. Key all figures in the statement of cash flows to the numbered items below, (1) Net income for Year 6 is $90,000.

(2) Beginning and ending balances in three accounts relating to the firm's customers were as follows:

On November 1. Year 6, a customer gave the firm a six-month, 8 percent. $15.000 note in satisfaction of an account receivable of $15.000. Interest is payable at ma- turity. This was the only note receivable held by the company during Year 6.

(3) The balances in Merchandise Inventory and Accounts Payable were as follows:

(4) During Year 6 the firm sold, for $25,000 cash, equipment with a book value of $38,000. The firm also purchased equipment for cash. Depreciation expense for Year 6 was $42,000. The balance in the Equipment account at acquisition cost decreased $26,000 between the beginning and end of Year 6. The balance in the Accumulated Depreciation account increased $11,000 between the beginning and end of Year 6.
(5) The balances in the Leasehold Asset and Lease Liability accounts were as follows on various dates:

On December 31. Year 3. the tirm signed a long-term lease which, by its terms, qualified as a capital lease. The firm made a payment under the lease of $10,000 on December 31, Year 6.
(6) The firm declared cash dividends during Year 6 of $26,000. of which $10,000 remains unpaid on December 31. Year 6. During Year 6, the firm paid $8,000 cash for dividends declared during Year 5.
(7) The firm classifies all marketable securities as available for sale. It purchased no marketable securities during Year 6 but sold marketable equity securities that had originally cost $4,500 for $9,100 cash in November, Year 6. The market and book values of marketable equity securities were $4,000 on December 3 1 , Year 5. and $10,500 on December 31. Year 6.
(8) Investors in $100,000 face value of convertible bonds of Breda Enteiprises Inc.
converted them into 8,000 shares of the firm's $12-par value common stock during Year 6. The common stock had a market value of $15 per share on the conversion date. Breda Enteiprises Inc. had originally issued the bonds at a premium.
Their book value on the date of the conversion was $105,000. The firm chose the generally accepted (alternative) accounting principle of recording the issuance of the common stock at market value and recognizing a loss of $15,000.
The loss is not classified as an extraordinary item. The firm amortized $1,500 of the bond premium between January 1. Year 6. and the date of the conversion.

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EXHIBIT 13.16 IRISH PAPER COMPANY Comparative Bolance Sheets (amounts in millions) (Problem 14) Year 8 Year 9 Year 10 Year 11 ASSETS Cash $ 374 $ 49 $ 114 $ 184 Accounts Receivable (not)... 611 723 829 670 Inventories.. 522 581 735 571 Prepayments 108 54 54 56 Total Current Assets $1.615 $1,407 $1,732 $1,481 Investments in Affiliates 254 375 322 333 Property, Plant, and Equipment 5,272 5,969 7,079 7,172 Accumulated Depreciation (2.160) (2.392) (2,698) (2.977) Other Assets 175 387 465 484 Total Assets $5,156 $5,746 $6,900 $6,493 LIABILITIES AND SHAREHOLDERS' EQUITY Accounts Payable $ 920 $ 992 $1,178. $1,314 Current Portion of Long-term Debt 129 221 334 158 Other Current Liabilities 98 93 83 38 Total Current Liabilities $1,147 $1,306 $1,595 $1,510 Long-term Debt 1,450 1.678 2,455 2.333 Deferred Income Taxes 607 Total Liabilities $3,204 694 $3,678 668 661 $4,718 $4,504 Preferred Stock 7 7 $ 7 Common Stock 629 428 432 439 Retained Earnings 1,331 1,648 1.758 1,557 Treasury Stock rr (15) (15) Total Shareholders' Equity $1,952 $2.068 (15) $2,182 (14) $1.989 Total Liabilities and Shareholders' Equity $5,156 $5,746 $6,900 $6,493