Indirect Method

2. Orange Incorporated has the following Balance Sheet and Income Statement: Orange Inc. Comparative Balance Sheet December 31, 2017 and December 31, 2018 2018 2017 Assets Cash $ 413,501 $ 187,273 Accounts Receivable, net 111,400 98,750 Inventory 89,000 93,600 Prepaid Expenses 6,125 3,850 Total Current Assets $ 620,026 $ 383,473 Equipment 502,220 462,500 Accumulated Depreciation-Equipment (247,375) (192,750) Motor Vehicles 145,750 163,000 Accumulated Depreciation-Motor Vehicles (70.100) (55.150) Total Assets S 950,521 $ 761,073 Liabilities and Equity Accounts Payable Wages Payable Income Taxes Payable Total Current Liabilities Bonds Payable Total Liabilities Common Stock, $15 par value Retained Earnings Total Liabilities and Equity $ 39,650 14,725 1.500 S 55,875 250.000 S 305,875 98,000 546,646 $ 950,521 S 37,600 11,150 3,500 s 52,250 237.500 $ 289,750 77,700 393.623 $761,073 Orange Jnc. Income Statement Orange Inc. Income Statement For the Year Ended December 31, 2018 Sales $1,933,000 Cost of Goods Sold 1,255,500 Gross Profit $ 677,500 Operating Expenses Depreciation Expenses-Equipment $ 73,625 193,075 $ 484,425 Depreciation Expenses-Motor Vehicles 27,450 Other Operating Expenses 92.000 Total Operating Expenses Income from Operations Other gains and losses Gain on Sale of Equipment Loss on Sale of Motor Vehicle Income before Taxes Income Tax Expense Net Income Additional information: 8,555 (3.000) $ 489,980 158,032 $ 331.948 A. Bonds worth $45,000 were retired at their book value in exchange for cash. A. Bonds worth $45,000 were retired at their book value in exchange for cash. B. Cash dividends of $178,925 were paid during the year. C. Equipment costing $35,000 with accumulated depreciation of $19,000 was sold for cash at a gain of $8,555. D. A Motor Vehicle costing $17,250 with accumulated depreciation of $12,500 was sold for cash at a loss of $3,000. E. Prepaid Expenses and Wages Payable relate to Other Expenses on the Income Statement F. All purchases and sales of inventory are on credit. G. If there were any purchases of equipment or motor vehicles, they were for cash. H. If any bonds or stocks were issued, they were issued for cash. Prepare a Statement of Cash Flows for Orange Incorporated for 2018. Use the grid on pages 4 and 5