GL1201 - Based on Exercise 12-11 LO P1, P2, P3, A1

Use the following financial statements and additional information.

SACRAMENTO INC. Comparative Balance Sheets June 30, 2017 and 2016
	2017				2016
Assets
Cash	$	100,800			$	45,200
Accounts receivable, net		76,000				59,000
Inventory		65,000				90,000
Prepaid expenses		5,400				6,800
Total current assets		247,200				201,000
Equipment		170,000				157,000
Accum. depreciationEquipment		(42,000	)			(14,000	)
Total assets	$	375,200			$	344,000
Liabilities and Equity
Accounts payable	$	28,000			$	34,000
Wages payable		8,000				19,000
Income taxes payable		4,500				5,000
Total current liabilities		40,500				58,000
Notes payable (long term)		35,000				70,000
Total liabilities		75,500				128,000
Equity
Common stock, $5 par value		250,000				180,000
Retained earnings		49,700				36,000
Total liabilities and equity	$	375,200			$	344,000

SACRAMENTO INC. Income Statement For Year Ended June 30, 2017
Sales				$	886,000
Cost of goods sold					542,000
Gross profit					344,000
Operating expenses
Depreciation expense	$	73,000
Other expenses		87,000
Total operating expenses					160,000
					184,000
Other gains (losses)
Gain on sale of equipment					4,300
Income before taxes					188,300
Income taxes expense					57,640
Net income				$	130,660

Additional Information

a) A $35,000 note payable is retired at its $35,000 carrying (book) value in exchange for cash.

b) The only changes affecting retained earnings are net income and cash dividends paid.

c) New equipment is acquired for $72,000 cash.

d) Received cash for the sale of equipment that had cost $59,000, yielding a $4,300 gain.

e) Prepaid Expenses and Wages Payable relate to Other Expenses on the income statement.

f) All purchases and sales of inventory are on credit.

Prepare the Statement of Cash flows for the year ended June 30, 2017 using the Direct Method. Hint Use the Cash T-account on the General Ledger tab to identify the sources and uses of cash. List cash outflows as negative values.

UnadjustedPost-closing

Unadjusted

SACRAMENTO INC.
Statement of Cash Flows (Direct Method)
For Year Ended June 30, 2017
Cash flows from operating activities:
Cash flows from investing activities:
Cash flows from financing activities: