3 The comparative balance sheets and an income statement for Gibson Corporation follow: Balance Sheets erences Assets As of December 31 Year 2 Year 1 Cash Accounts receivable Merchandise inventory Prepaid rent Equipment Accumulated depreciation Land Total assets Liabilities Accounts payable (inventory) Salaries payable Stockholders' equity Common stock, $50 par value Retained earnings $ 73,771 $ 38,270 28,705 157,720 21,050 173,490 2,390 4,780 257,840 289,070 $ 563,706 (149,140) 192,420 (238,410) 81,020 $ 369,270 $ 69,636 78,990 30,088 25,790 255,000 201,000 208,982 63,490 Total liabilities and equity $ 563,706 $ 369,270 Income Statement For the Year Ended December 31, Year 2 Sales Cost of goods sold Gross profit $1,498,000 (796,138) 701,862 Operating expenses Depreciation expense Rent expense Salaries expense Other operating expenses Net income (21,660) (25,130) (252,220) (257,360) $ 145,492 < Prev 23 of 231 Next www 23 Other Information 15 15 points References 1. Purchased land for $111,400. 2. Purchased new equipment for $99,300. 3. Sold old equipment that cost $130,530 with accumulated depreciation of $110,930 for $19,600 cash. 4. Issued common stock for $54,000. Required Prepare the statement of cash flows for 2017 using the indirect method. (Amounts to be deducted and cash outflows should be indicated by a minus sign.) Mc GIBSON CORPORATION Statement of Cash Flows For the Year Ended December 31, Year 2 Cash flows from operating activities: Add: Decrease in current assets and Increases in current liabilities: Less: Increases in current assets and Decreases in current liabilities: Plus: Noncash charges < Prev 23 of 23 Next Final Exam 23 15 points Add: Decrease in current assets and Increases in current liabilities: References Less: Increases in current assets and Decreases in current liabilities: Plus: Noncash charges Cash flows from investing activities: Cash flows from financing activities: Ending cash balance Saved Prev 23 of 23 Next