13-27

Statement of cash flowsdirect method (CMA adapted)

(LO 3, 4, 5, 7) Blake Weaver, Cook Enterprises' controller, is preparing the financial statements for 2016. He has completed the comparative balance sheets and income statement, which follow, and has gathered this additional information:

• On December 31, 2016, Cook sold a piece of equipment with an original cost of $25,000 for $30,000 cash. The equipment had a book value of $13,000.
• On February 1, 2016, Cook issued $100,000 of common stock to raise cash in anticipation of the purchase of a new building later in the year.
• On February 2, 2016, Cook took out a ten-year $75,000 long-term loan to provide the remaining funds needed to purchase the building.
• On May 15, 2016, Cook paid $150,000 for the new building.
• The company repaid $4,600 of the long-term debt before the end of the year.

  Cook Enterprises Income Statement For the Year Ended December 31, 2016
  Sales revenue		$1,070,000
  Gain on equipment sale		17,000
  Total revenue		1,087,000
  Cost of goods sold		700,000
  Operating expenses
  Depreciation expense	$30,000
  Interest expense	7,400
  Wages expenses	175,000
  Other expenses	16,000	228,400
  Income before taxes		158,600
  Tax expense		63,400
  Net income		$95,200

  Cook Enterprises Comparative Balance Sheets As of December 31
  	2016	2015
  Cash	$124,200	$40,400
  Accounts receivable, net	287,200	269,800
  Inventory	125,000	95,000
  Total current assets	536,400	405,200
  Property, plant, & equipment	297,000	160,000
  Accumulated depreciation	90,000	60,000
  Net property, plant, & equipment	207,000	100,000
  Total assets	$743,400	$505,200
  Accounts payable	$103,000	$120,000
  Wages payable	27,000	30,000
  Accrued liabilities	20,000	25,000
  Taxes payable	17,600	20,000
  Mortgage payable	70,400	0
  Total liabilities	238,000	195,000
  Common stock	350,000	250,000
  Retained earnings	155,400	60,200
  Total stockholders' equity	505,400	310,200
  Total liabilities & stockholders' equity	$743,400	$505,200

Required

Using the direct method, prepare Cook Enterprises' statement of cash flows for 2016.