Exercise 23-14

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

STELLAR INC.

COMPARATIVE BALANCE SHEET

AS OF DECEMBER 31, 2017 AND 2016

12/31/17

12/31/16

Cash$6,100

$6,900

Accounts receivable61,900

50,500

Short-term debt investments (available-for-sale)34,800

18,200

Inventory39,900

59,800

Prepaid rent4,900

4,000

Equipment155,500

131,200

Accumulated depreciationequipment(34,800

)(25,300

)Copyrights45,700

50,200

Total assets$314,000

$295,500

Accounts payable$46,200

$39,700

Income taxes payable4,000

6,100

Salaries and wages payable7,900

4,000

Short-term loans payable7,900

10,000

Long-term loans payable59,800

68,600

Common stock, $10 par100,000

100,000

Contributed capital, common stock30,000

30,000

Retained earnings58,200

37,100

Total liabilities & stockholders equity$314,000

$295,500

STELLAR INC.

INCOME STATEMENT

FOR THE YEAR ENDING DECEMBER 31, 2017

Sales revenue$335,575

Cost of goods sold173,200

Gross profit162,375

Operating expenses119,100

Operating income43,275

Interest expense$11,400

Gain on sale of equipment2,000

9,400

Income before tax33,875

Income tax expense6,775

Net income$27,100

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 $20,100and was 70% depreciated was sold during 2017.

Prepare a statement of cash flows using the indirect method.(Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)

Exercise 23-14 Stellar Inc., a greeting card company, had the following statements prepared as of Dece STELLAR INC. COMPARATIVE BALANCE SHEET AS OF DECEMBER 31, 2017 AND 2016 Cash Accounts receivable Short-term debt investments (available-for-sale) Inventory Prepaid rent Equipment Accumulated depreciationequipment Copyrights Total assets Accounts payable Income taxes payable Salaries and wages payable Short-term loans payable Long-term loans payable Common stock, $10 par Contributed capital, common stock Retained earnings Total liabilities & stockholders' equity STELLAR INC. INCOME STATEMENT FOR THE YEAR ENDING DECEMBER 31, 2017 Sales revenue Cost of goods sold Gross profit Operating expenses Operating income Interest expense Gain on sale of equipment Income before tax Income tax expense Net income Additional information: 1 Dividends in the amount of $6,000 were declared and paid d 2 Depreciation expense and amortization expense are included expenses. 3 No unrealized gains or losses have occurred on the investmen year. 4 Equipment that had a cost of $20,100 and was 70% depreciat during 2017. Prepare a statement of cash flows using the indirect method. (Show amounts that decrease cash flow with either a -15,000 or in parenthesis e.g. (15,000).) STELLAR INC. Statement of Cash Flows Adjustments to reconcile net income to $ LINK TO TEXT ad the following statements prepared as of December 31, 2017. STELLAR INC. PARATIVE BALANCE SHEET DECEMBER 31, 2017 AND 2016 12/31/2017 $6,100 12/31/2016 $6,900 61,900 50,500 34,800 18,200 39,900 59,800 4,900 4,000 155,500 131,200 (34,800 ) (25,300 ) 45,700 50,200 $314,000 $295,500 $46,200 $39,700 4,000 6,100 7,900 4,000 7,900 10,000 59,800 68,600 100,000 100,000 30,000 30,000 58,200 37,100 $314,000 $295,500 . ENT EMBER 31, 2017 $335,575 173,200 162,375 119,100 43,275 $11,400 2,000 9,400 33,875 6,775 $27,100 the amount of $6,000 were declared and paid during 2017. expense and amortization expense are included in operating expenses. gains or losses have occurred on the investments during the year. at had a cost of $20,100 and was 70% depreciated was sold during 2017. ounts that decrease cash flow with either a - sign e.g. e.g. (15,000).) $ $