Multiple Choice Question 67

Financial statements for Sheridan Company are given below:

Sheridan CompanyBalance SheetJanuary 1, 2018

AssetsEquitiesCash$965000Accounts payable$455000Accounts receivable861000Buildings and equipment3690000Accumulated depreciation

buildings and equipment

(1250000

)Common stock2740000

Patents436000Retained earnings1507000

$4702000

$4702000

Sheridan CompanyStatement of Cash FlowsFor the Year Ended December 31, 2018

Increase (Decrease) in Cash.Cash flows from operating activitiesNet income$1200000Adjustments to reconcile net income to net cash

provided by operating activities:Increase in accounts receivable$(386000)Increase in accounts payable197000Depreciationbuildings and equipment360000

Gain on sale of equipment(143000)Amortization of patents4600074000Net cash provided by operating activities1274000.Cash flows from investing activitiesSale of equipment293000Purchase of land(609000

)Purchase of buildings and equipment(1155000)Net cash used by investing activities(1471000)

.Cash flows from financing activitiesPayment of cash dividend(360000)Sale of common stock964000

Net cash provided by financing activities604000Net increase in cash407000Cash, January 1, 2018965000Cash, December 31, 2018

$1372000

Total assets on the balance sheet at December 31, 2018 are $6650000. Accumulated depreciation on the equipment sold was $340000.

Capital stock (plus any additional paid-in capital) at December 31, 2018 was

$1540000.

$3704000.

$2380000.

$2740000.