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Condensed financial data of Cheng Inc. follow. CHENG INC. Comparative Balance Sheets December 31 Assets 2017 2016 Cash $80,800 $48,400 Accounts receivable 92,800 33,000 Inventory
Condensed financial data of Cheng Inc. follow.
CHENG INC. Comparative Balance Sheets December 31 | ||||||
Assets | 2017 | 2016 | ||||
Cash | $80,800 | $48,400 | ||||
Accounts receivable | 92,800 | 33,000 | ||||
Inventory | 117,500 | 102,850 | ||||
Prepaid expenses | 28,400 | 26,000 | ||||
Investments | 143,000 | 114,000 | ||||
Equipment | 270,000 | 242,500 | ||||
Accumulated depreciation-equipment | (50,000 | ) | (52,000 | ) | ||
Total | $682,500 | $514,750 | ||||
Liabilities and Stockholders Equity | ||||||
Accounts payable | $112,000 | $67,300 | ||||
Accrued expenses payable | 16,500 | 17,000 | ||||
Bonds payable | 110,000 | 150,000 | ||||
Common stock | 220,000 | 175,000 | ||||
Retained earnings | 224,000 | 105,450 | ||||
Total | $682,500 | $514,750 |
CHENG INC. Income Statement For the Year Ended December 31, 2017 | ||||
Sales revenue | $392,780 | |||
Less: | ||||
Cost of goods sold | $135,460 | |||
Operating expenses, excluding depreciation | 12,410 | |||
Depreciation expense | 46,500 | |||
Income tax expense | 27,280 | |||
Interest expense | 4,730 | |||
Loss on disposal of plant assets | 7,500 | 233,880 | ||
Net income | $158,900 |
Additional information:
1. | New equipment costing $85,000 were purchased for cash during the year. | |
2. | Old equipment having an original cost of $57,500 was sold for $1,500 cash. | |
3. | Bonds matured and were paid off at face value for cash. | |
4. | A cash dividend of $40,350 was declared and paid during the year. |
Prepare a statement of cash flows using the indirect method
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