Ch 13 assignments 2

1. Condensed financial data for Cheng, Inc. follow. Sales 392,780 Cost of Goods Sold 135,460 Gross Profit 257,320 Operating Expenses: Depreciation 46,500 Salaries 8,900 Insurance 1,100 Rent 2,410 Total Operating Expenses 58,910 Operating Income 198,410 Other Expenses/Losses: Loss on Sale of Plant Assets 7,500 Interest Expense 4,730 (12,230) Income Before Taxes 186,180 Income Tax Expense 27,280 Net Income 158,900 2018 2017 Assets Cash 80,800 48,400 Accounts Receivable 92,800 33,000 Merchandise Inventory 117,500 102,850 Prepaid Insurance 28,400 26,000 Investments 143,000 114,000 Plant Assets 270,000 242,500 Accumulated Depreciation (50,000) (52,000) Total 682,500 514,750 Liabilities and Stockholders' Equity Accounts Payable 112,000 67,300 Salaries Payable 10,500 12,000 Income Taxes Payable 6,000 5,000 Bonds Payable 110,000 150,000 Common Stock 150,000 110,000 APIC-Excess of Par Value-Common 70,000 65,000 Retained Earnings 224,000 105,450 Total 682,500 514,750 Additional Information: 1. New plant assets costing $85,000 were purchased for cash during the year. 2. Old plant assets having an original cost of $57,500 (accumulated depreciation $48,500) were sold for $1,500 cash. 3. Bonds with a face value of $40,000 matured and were paid off with cash. 4. A cash dividend of $40,350 was declared and paid during the year. 5. Investments costing $29,000 were purchased during the year. 6. Common stock with a par value of $40,000 was issued for $45,000 cash. Instructions: A. Complete a set of cash flow T-accounts using the indirect method of computing cash flow from operations. B. Prepare a formal cash flow statement. C. Complete a set of cash flow T-accounts using the direct method of computing cash flow from operations.