Egert Company, a merchandiser, recently completed its calendar-year 2017 operations. For the year, (1) all sales are credit sales, (2) all credits to Accounts Receivable reflect cash receipts from customers, (3) all purchases of inventory are on credit, (4) all debits to Accounts Payable reflect cash payments for inventory, and (5) Other Expenses are paid in advance and are initially debited to Prepaid Expenses. The company's income statement and balance sheets follow. EGERT COMPANY Comparative Balance Sheets December 31, 2017 and 2016 2017 2016 $ 73,300 74,000 281,000 1,800 430,100 171,000 (40,000) $ 561,100 $ 89,800 57,000 257,000 2,200 406,000 117,000 (50,000) $ 473,000 Assets Cash Accounts receivable Inventory Prepaid expenses Total current assets Equipment Accum. depreciation-Equipment Total assets Liabilities and Equity Accounts payable Short-term notes payable Total current liabilities Long-term notes payable Total liabilities Equity common stock, $5 par value Paid-in capital in excess of par, common stock Retained earnings Total liabilities and equity $ 56,100 15,000 71,100 85,000 156,100 $ 121,000 9,000 130,000 64,000 194,000 150,000 164,000 42,000 199,000 $ 561,100 129,000 $ 473,000 $ 618,000 294,000 324,000 EGERT COMPANY Income Statement For Year Ended December 31, 2017 Sales Cost of goods sold Gross profit Operating expenses Depreciation expense $ 17,000 Other expenses 141,000 Other gains (losses) Loss on sale of equipment Income before taxes Income taxes expense Net income 158,000 (5,400) 160,600 28,000 $132.600 Additional Information on Year 2017 Transactions a. The loss on the cash sale of equipment was $5,400 (details in b). b. Sold equipment costing $48,000, with accumulated depreciation of $27,000, for $15,600 cash. c. Purchased equipment costing $102,000 by paying $36,000 cash and signing a long-term note payable for the balance. d. Borrowed $6,000 cash by signing a short-term note payable. e. Paid $45,000 cash to reduce the long-term notes payable. f. Issued 2,800 shares of common stock for $20 cash per share. g. Declared and paid cash dividends of $62,600. Requirement General Journal General Ledger Trial Balance Direct Method Indirect Method General Journal tab - Reconstruct the entries to summarize the activity between December 31, 2016 and December 31, 2017. Direct Method tab - Prepare the Statement of Cash flows for the year ended December 31, 2017 using the direct method. Indirect Method tab - Prepare the reconciliation to the indirect method. Journal entry worksheet 2 3 4 5 6 7 8 I... 14 > Reconstruct the journal entry for cash receipts from customers, incorporating the change in the related balance sheet account(s), if any. Note: Enter debits before credits. Date Account Title Debit Credit Dec 31 Record entry Clear entry View general journal Dates: Dec 31 to: Dec 31 Unadjusted EGERT COMPANY Statement of Cash Flows (Direct Method) For Year Ended December 31, 2017 Cash flows from operating activities: Cash flows from investing activities: Cash flows from financing activities:
