Exercise 23-14

Brecker Inc., a greeting card company, had the following statements prepared as of December 31, 2017.

BRECKER INC.

COMPARATIVE BALANCE SHEET

AS OF DECEMBER 31, 2017 AND 2016

12/31/17

12/31/16

Cash$6,000

$7,000

Accounts receivable62,000

51,000

Short-term debt investments (available-for-sale)35,000

18,000

Inventory40,000

60,000

Prepaid rent5,000

4,000

Equipment154,000

130,000

Accumulated depreciationequipment(35,000

)(25,000

)Copyrights46,000

50,000

Total assets$313,000

$295,000

Accounts payable$46,000

$40,000

Income taxes payable4,000

6,000

Salaries and wages payable8,000

4,000

Short-term loans payable8,000

10,000

Long-term loans payable60,000

69,000

Common stock, $10 par100,000

100,000

Contributed capital, common stock30,000

30,000

Retained earnings57,000

36,000

Total liabilities & stockholders' equity$313,000

$295,000

BRECKER INC.

INCOME STATEMENT

FOR THE YEAR ENDING DECEMBER 31, 2017

Sales revenue$338,150

Cost of goods sold175,000

Gross profit163,150

Operating expenses120,000

Operating income43,150

Interest expense$11,400

Gain on sale of equipment2,000

9,400

Income before tax33,750

Income tax expense6,750

Net income$27,000

Additional information:

1.Dividends in the amount of $6,000were declared and paid during 2017.2.Depreciation expense and amortization expense are included in operating expenses.3.No unrealized gains or losses have occurred on the investments during the year.4.Equipment that had a cost of $20,000and was 70% depreciated was sold during 2017.

I need to make a statement of cash flows with this information using the indirect method.