Exercise 23-12

Condensed financial data of Headland Company for 2017 and 2016 are presented below.

HEADLAND COMPANY COMPARATIVE BALANCE SHEET AS OF DECEMBER 31, 2017 AND 2016
		2017			2016
Cash		$1,810			$1,120
Receivables		1,790			1,330
Inventory		1,570			1,940
Plant assets		1,870			1,740
Accumulated depreciation		(1,230	)		(1,150	)
Long-term investments (held-to-maturity)		1,300			1,440
		$7,110			$6,420
Accounts payable		$1,220			$910
Accrued liabilities		200			260
Bonds payable		1,370			1,550
Common stock		1,860			1,740
Retained earnings		2,460			1,960
		$7,110			$6,420

HEADLAND COMPANY INCOME STATEMENT FOR THE YEAR ENDED DECEMBER 31, 2017
Sales revenue		$6,810
Cost of goods sold		4,680
Gross margin		2,130
Selling and administrative expenses		920
Income from operations		1,210
Other revenues and gains
Gain on sale of investments		80
Income before tax		1,290
Income tax expense		530
Net income		760
Cash dividends		260
Income retained in business		$500

Additional information: During the year, $70 of common stock was issued in exchange for plant assets. No plant assets were sold in 2017. Prepare a statement of cash flows using the direct method. (Show amounts in the investing and financing sections that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)