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Martinez Inc., a greeting card company, had the following statements prepared as of December 31, 2017. MARTINEZ INC. COMPARATIVE BALANCE SHEET AS OF DECEMBER 31,
Martinez Inc., a greeting card company, had the following statements prepared as of December 31, 2017.
MARTINEZ INC. COMPARATIVE BALANCE SHEET AS OF DECEMBER 31, 2017 AND 2016 12/31/17 12/31/16 Cash $5,900 $7,100 Accounts receivable 62,000 51,000 Short-term debt investments (available-for-sale) 35,000 18,100 Inventory 40,400 59,900 Prepaid rent 5,000 4,000 Equipment 153,300 129,100 Accumulated depreciation-equipment (35,000) (24,800 ) Copyrights 46,300 50,300 Total assets $312,900 $294,700 Accounts payable Income taxes payable Salaries and wages payable Short-term loans payable Long-term loans payable Common stock, $10 par Contributed capital, common stock Retained earnings Total liabilities & stockholders' equity $46,500 4,100 8,100 8,000 60,600 100,000 30,000 55,600 $312,900 $40,200 6,100 4,100 10,100 69,600 100,000 30,000 34,600 $294,700 MARTINEZ INC. INCOME STATEMENT FOR THE YEAR ENDING DECEMBER 31, 2017 Sales revenue Cost of goods sold Gross profit Operating expenses Operating income Interest expense $11,300 Gain on sale of equipment 2,000 Income before tax Income tax expense $338,150 175,700 162,450 119,400 43,050 9,300 33,750 6,750 $27,000 Net income Additional information: 1. Dividends in the amount of $6,000 were declared and paid during 2017. 2. Depreciation expense and amortization expense are included in operating expenses. 3. No unrealized gains or losses have occurred on the investments during the year. 4. Equipment that had a cost of $19,800 and was 70% depreciated was sold during 2017. Prepare a statement of cash flows using the direct method. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).) MARTINEZ INC. Statement of Cash FlowsStep by Step Solution
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