Additional points:

• Net income for the year was $172,500. Dividends were declared and paid at the end of the fiscal year.
• Equipment costing $98,000 was purchased by paying $28,000 in cash and issuing shares of common stock for the remainder
  • Note- they purchased additional equipment by paying cash for the full purchase price.
• Equipment that cost $3,750, on which $750 of depreciation had been accumulated, was sold for a loss.
• Short-term investments that cost $25,000 were sold during the year resulting in a gain.
• Struggling to pay it's a/p on time, so they issued additional shares of common stock to supplement their cash flow.

Instructions: Prepare a cash flow statement using the indirect method of reporting

Cash Accounts Receivable, net Inventory Prepaid Expenses Short-Term Investments Equipment A/D- Eqp Building A/D- Bldgs Land Accounts Payable Salaries \& Wages Payable Interest Payable Income Tax Payable Bonds Payable L/T Notes Payable Common Stock Retained Earnings Sales Revenue Less: Cost of Goods Sold Gross Profit Less: Operating Expenses (includes depreciation) Income from Operations Other: Gain on sale of Investments Loss on sale of machinery Net Income \begin{tabular}{rr} $1,795,250 \\ 1,102,000 \\ \hline 693,250 \\ 523,700 \\ 169,550 \\ & 2,950 \\ \hline$172,500 \\ \hline \hline \end{tabular}