Indirect and Direct Method

For the Year Ended December 31, 2016 $2100 1,400 700 Revenue Cost of goods sold Gross profit Operating expenses Selling and administrative Depreciation $ 355 85 440 260 78 S 182 Total operating expenses Income before income taxes Income tax expense Net income 12/31/16 12/31/15 Comparative Balance Sheets Assets: Cash Accounts receivable (net) Inventory Property, plant, and equipment Less: Accumulated depreciation 300 227 160 960 (405) $1,242 $ 220 240 120 800 (320) $1,060 Total assets Liabilities and shareholders' equity: Accounts payable Payables for selling and admin. expenses Income taxes payable Long-term debt Common stock Retained earnings $ 130 170 50 100 400 210 $1,060 S 145 147 95 463 392 $1,242 Total liabilities and shareholders' equity