Harding Industries, Inc.
Income Statement
For the Year Ended December 31, 2014
Sales revenues			$950,000
Less: Cost of goods sold			385,000
Gross profit			$565,000
Less operating expenses:
Salaries and wages expense		$187,000
Insurance expense		12,500
Depreciation expense		57,900
Other operating expenses		87,000
	Total operating expenses		344,400
Operating income			$220,600
Plus other income and less other expenses:
Interest expense		$5,500
Gain on sale of PP and E		3,000
	Total other income and expenses		2,500
Income before income taxes			$218,100
Less: Income tax expense			65,430
Net income			$152,670

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Additional information follows:

a.	Sold plant asset for $ 4 comma 200$4,200. The original cost of this plant asset was $ 10 comma 100$10,100 and it had $ 8 comma 900$8,900 of accumulated depreciation associated with it.
b.	Paid $ 6 comma 500$6,500 on the bonds payable; issued $ 44 comma 500$44,500 of new bonds payable.
c.	Declared and paid cash dividends of $ 31 comma 600$31,600.
d.	Purchased new investment for $ 12 comma 000$12,000.
e.	Purchased new equipment for $ 25 comma 100$25,100.

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Harding Industries, Inc.
Comparative Balance Sheets
December 31, 2014 and 2013
Assets		2014	2013
Current assets:
Cash		$472,000	$285,000
Accounts receivable		79,000	129,000
Inventory		335,000	216,000
Prepaid insurance		7,500	5,500
Total current assets		$893,500	$635,500
Property, plant, and equipment		$610,000	$595,000
Less: Accumulated depreciation		(157,000)	(108,000)
Investments		91,000	79,000
Total assets		$1,437,500	$1,201,500
Liabilities
Current liabilities:
Accounts payable (inventory purchases)		$60,000	$32,000
Wages payable		16,400	17,300
Interest payable		1,700	800
Income taxes payable		56,430	10,000
Other accrued expenses payable		6,200	3,700
Total current liablities		$140,730	$63,800
Long-term liabilities		60,000	22,000
Total liabilities		$200,730	$85,800
Stockholders' equity
Common stock		$602,000	$602,000
Retained earnings		634,770	513,700
Total stockholders' equity		$1,236,770	$1,115,700
Total liabilities and equity		$1,437,500	$1,201,500

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	Harding Industries, Inc.
	Statement of Cash Flows (Indirect Method)
	For the Year Ended December 31, 2014
	Operating Activities:
	Net income
	Adjustments to reconcile net income to cash basis
	Depreciation expense
	Gain on sale of plant asset
	Decrease in accounts receivable
	Increase in inventory
	Increase in prepaid insurance
	Increase in accounts payable
	Decrease in wages payable
	Increase in interest payable
	Increase in taxes payable
	Increase in other accrued operating expenses
	Net cash provided by (used for) operating activities

	Investing Activities:
	Purchase of new investments
	Proceeds on sale of plant asset
	Purchase of equipment
	Net cash provided by (used for) investing activities

	Financing Activities:
	Dividends paid
	Repayment of long-term debt
	Proceeds from bond issuance
	Net cash provided by (used for) financing activities

	Net increase (decrease) in cash
	Cash, beginning of the year
	Cash, end of the year