E16-23 Computing the cash effect Stenback Exercise Equipment, Inc. reported the following financial statements for 2016: Learning Objective 2. Payment: $6,000 4. Dividends $32,000 STENBACK EXERCISE EQUIPMENT, INC. Income Statement Year Ended December 31, 2016 $ 711,000 343,000 368,000 Sales Revenue Cost of Goods Sold Gross Profit Operating Expenses: Depreciation Expense Other Operating Expenses Total Operating Expenses Net Income $ 51,000 215,000 266,000 $ 102,000 2015 STENBACK EXERCISE EQUIPMENT, INC. Comparative Balance Sheet December 31, 2016 and 2015 2016 Assets Current Assets Cash $ 21,000 Accounts Receivable 56,000 Merchandise Inventory 84,000 Long-term Assets: Plants Assets 268,700 Accumulated Depreciation--Plant Assets (41,700) Investments 93,000 Total Assets $ 481,000 $ 15.000 50,000 38.000 217,200 34,200) 75,000 $ 411,000 Liabilities $ 75,000 2.000 $ 74,000 4.000 Current Liabilities Accounts Payable Salaries Payable Long-term Liabilities: Notes Payable Total Liabilities 59,000 136,000 65,000 143,000 Stockholders' Equity Common Stock, no par 42,000 Retained Earnings 303,000 Total Stockholders' Equity 345,000 Total Liabilities and Stockholders' Equity S481,000 35,000 233,000 268,000 $ 411,000 Requirements 1. Compute the amount of Stenback Exercise's acquisition of plant assets. Assume the acquisition was for cash. Stenback Exercise disposed of plant assets at book value. The cost and accumulated depreciation of the disposed asset was $43,500. No cash was received upon disposal. 2. Compute new borrowing or payment of long-term notes payable, with Stenback Exercise having only one long-term notes payable transaction during the year. 3. Compute the issuance of common stock with Stenback Exercise having only one common stock transaction during the year. 4. Compute the payment of cash dividends. Note: Frerico FI 21