41 Stockholder's Equity 2 Common Stock, $10 par 43 Retained Earnings 370,000 145,000 515,000 120,000 400,000 Total Stockholder's Equity 6 Total Liabilities and Stockholders Equity 782,250 712,000 47 Chapman Company Income Statement For the Year Ended May 31, 2017 48 49 50 51 52 53 Sales Revenue 54 Cost of Goods Sold S5 56 Expenses 57 Salaries and Wages Expense 58 Interest Expense 59 Depreciation Expense 60 other Expenses 61 62 Operating Income 63 Income Tax Expense 64 Net Income 1,255,250 722,000 Gross Profit 252,100 75,000 25,000 8,150 Total Expenses 173,000 43,000 130,000 65 67 The following is additional information concerning Chapman's transactions during the year ended May 31, 2017 68 1) All sales made during the year were made on account. 69 2)All merchandise was purchased on account, comprising the total accounts payable account. 70 3)Plant assets costing 71 4)The "Other Expenses" are related to prepaid items 72 5) All income taxes incurred during the year were paid during the year 73 6) in order to supplement its cash, Chapman issued 2,000 shares of common stock at par 74 7) Cash dividends of $1os,000 were declared and paid at the end of the fiscal year 75 76 Prepare a statement of cash flows using the direct method. $98,000 were purchased by paying $28,000 in cash and issuing 7,000 shares of stock. a statement of cash flows using the indirect method 79 81 4Sheett