JS Weygandt, Accounting Principles, Seventh Canadian Edition, Volume 2 Help System Announcements Question 2 Sandhill Ltd., a private company reporting under ASPE, reported the following for the years ended May 31, 2017 and 2016, SANDHILL LTD. Balance Sheet May 31 Assets 2017 2016 Cash $31,675 $44,250 Accounts receivable 85,150 76,250 Inventory 174,000 157,250 Prepaid expenses 4,900 6,400 Land 123,250 74,500 Equipment 309,000 189,000 Accumulated depreciation (67,200) (37,250) Total assets $660,775 $510,400 Liabilities and Shareholders' Equity Accounts payable $41,350 $37,250 Dividends payable 6,400 4,900 Income taxes payable 2,100 5,900 Mortgage payable 121,000 77,250 Common shares 213,500 163,250 Retained earnings 276,425 221,850 Total liabilities and shareholders' equity $660,775 $510,400 Additional Information: 1. Profit for 2017 was $114,825 2. Common shares were issued for $50,250. 3 Land with a cost of $50,250 was sold at a loss of $18,900. 4. Purchased land with a cost of $99,000 with a $55,250 down payment and financed the remainder with a mortgage note payable 5. No equipment was sold during 2017 6. Net sales for the year were $672,800. 7 Cost of goods sold for the year was $399,000 equity $660,775 $510,400 Additional Information: 1. Profit for 2017 was $114,825. 2. Common shares were issued for $50,250. 3. Land with a cost of $50,250 was sold at a loss of $18,900. 4. Purchased land with a cost of $99,000 with a $55,250 down payment and financed the remainder with a mortgage note payable. 5. No equipment was sold during 2017 Net sales for the year were $672,800. 7 Cost of goods sold for the year was $399,000. 8 Operating expenses, including depreciation expense, were $96,900. 9. Interest expense was $4,900. Income tax expense was $38,275. Accounts payable is used for merchandise purchases. 6. 10. Prepare a cash flow statement for the year using the direct method. (Show amounts that decrease cash flow with either a - sign e.g.-15, SANDHILL LTD. Cash Flow Statement - Direct Method