00 E10. Statement of Cash Flows Indirect Method, Disclosures Starland Corporation provided the following comparative balance sheets and income statement. Starland Corporation Balance Sheets At December 31 Assets Current Year Prior Year Current Assets Cash Accounts Receivable- net Merchandise Inventory Prepaid Expenses $ 270,001 145,847 255,368 268,363 75,000 $ 974,722 744,578 268,363 381,358 55,000 Total Curent Assets Noncurrent Assets Property, Plant, and Equipment - net $3,854,542 $3,854,542 $4,829,264 $4,323,471 $4,323,471 $5,068,049 Total Noncurrent Assets Total Assets Liabilities Current Liabilities Current Portion of Long-Term Debt Accounts Payable Income Taxes Payable $ 125,622 528,252 360,877 446,695 85,877165,25 Total Current Liabilities Noncurrent Liabilities Notes Payable $ 839,751 $972,827 $730,854 $ $ 730,854 $1,570,605 $1,608,424 854 635,597 $635,597 Total Noncurrent Liabilities Total Liabilities Shareholders' Equity Common Stock, $1 par value s 381,358 381,358 Noncurrent Assets $3,854,542 $4,323,471 $3,854,542 $4,323,471 $4,829,264 Property, Plant, and Equipment - net Total Noncurrent Assets Total Assets $5,068,049 Liabilities Current Liabilities Current Portion of Long-Term Debt Accounts Payable Income Taxes Payable $ 125,622 528,252 185,877 360,877 446,695 165,255 Total Current Liabilities Noncurrent Liabilities Notes Payable 839,751972,827 $ 730,854 730,854 $1,570,605 635,597 635,597 $1,608,424 Total Noncurrent Liabilities Total Liabilities Shareholders' Equity Common Stock, $1 par value Additional Paid-in Capital in Excess of Par- Common Retained Earnings S 381,358 381,358 1,129,950 1,129,950 2,083,317 $3,798,659 $3,594,625 135,000) $5,068,049 2,287351 Total Shareholders' Equity Less: Treasury Stock at Cost Total Liabilities and Shareholders' Equity (540,000) $4,829,264 Starland Corporation Income Statement For the Current Year Ended December 3'1 Sales Cost of Goods Sold Gross Profit Selling, General, and Administrative Expenses Bad Debt Expense Depreciation Expense Total Operating Expenses Operating Income Loss on Disposal of Equipment Interest Expense Income before Tax Income Tax Expense Net Income $1,875,050 1,125,030 $ 750,020 $ 205,000 4,394 39,525 $ 248,919 S 501,101 $ (50,000) 12,500) $ 438,601 (175,440) $ 263,161 Additional Information .Starland did not acquire any additional plant assets during the current year Starland sold equipment with a carrying value of $429,404 at a $50,000 loss The company borrowed additional funds by issuing a long-term note. Any debt payments made during the year reduced the current portion of long-term debt