2016 Question 2 Condensed financial data of Cheng Inc. follow. CHENG INC. Comparative Balance Sheets December 31 Assets 2017 Cash $116,300 Accounts receivable 92,700 Inventory 111,200 Prepaid expenses 29,000 Investments 140,900 Equipment 265,000 Accumulated depreciation equipment (46,800) Total $708,300 $48,400 33,400 102,100 25,500 113,300 241,100 (52,000) $511,800 Liabilities and Stockholders' Equity Accounts payable Accrued expenses payable Bonds payable Common stock Retained earnings $111,100 16,500 119,300 219,900 241,500 $708,300 $67,800 17,500 149,300 174,600 102,600 $511,800 Total $391,300 CHENG INC. Income Statement For the Year Ended December 31, 2017 Sales revenue Less: Cost of goods sold $135,200 Operating expenses, excluding depreciation 11,500 Depreciation expense 31,300 Income tax expense 27,800 Interest expense 4,600 Loss on disposal of plant assets 7,500 Net income 217,900 $173,400 Additional information: 1. New equipment costing $80,800 were purchased for cash during the year. 2. Old equipment having an original cost of $56,900 was sold for $12,900 cash. 3. Bonds matured and were paid off at face value for cash. 4. A cash dividend of $34,500 was declared and paid during the year. Prepare a statement of cash flows using the indirect method. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).) CHENG INC. Statement of Cash Flows Adjustments to reconcile net income to Cash at Beginning of Period Cash at End of Period Cash Flows from Financing Activities Cash Flows from Investing Activities Cash Flows from Operating Activities Net Cash Provided by Financing Activities Net Cash Provided by Investing Activities Net Cash Provided by Operating Activities Net Cash Used by Financing Activities Net Cash Used by Investing Activities Net Cash Used by Operating Activities Net Decrease in Cash Net Increase in Cash