CHENG INC.

Comparative Balance Sheets

December 31

Assets

2017

2016

Cash

$118,000

$47,800

Accounts receivable

91,600

32,200

Inventory

113,000

102,900

Prepaid expenses

29,400

26,000

Investments

141,000

113,500

Equipment

265,700

241,600

Accumulated depreciation-equipment

(46,000

)

(51,400

)

Total

$712,700

$512,600

Liabilities and Stockholders Equity

Accounts payable

$111,300

$67,900

Accrued expenses payable

16,100

17,000

Bonds payable

110,700

149,500

Common stock

219,500

174,200

Retained earnings

255,100

104,000

Total

$712,700

$512,600

CHENG INC.

Income Statement

For the Year Ended December 31, 2017

Sales revenue$391,900

Less:

Cost of goods sold

$135,900

Operating expenses, excluding depreciation

11,600

Depreciation expense

29,500

Income tax expense

26,300

Interest expense

4,400

Loss on disposal of plant assets

7,500

215,200

Net income

$176,700

Additional information:

1.New equipment costing $79,400 were purchased for cash during the year.

2.Old equipment having an original cost of $55,300 was sold for $12,900 cash.

3.Bonds matured and were paid off at face value for cash.

4.A cash dividend of $25,600 was declared and paid during the year.

Prepare a statement of cash flows using the indirect method