Problem 12-10A

Condensed financial data of Sage Hill, Inc. follow.

Sage Hill, Inc. Comparative Balance Sheets December 31
Assets		2017			2016
Cash		$ 164,832			$ 98,736
Accounts receivable		179,112			77,520
Inventory		229,500			209,814
Prepaid expenses		57,936			53,040
Long-term investments		281,520			222,360
Plant assets		581,400			494,700
Accumulated depreciation		(102,000	)		(106,080	)
Total		$1,392,300			$1,050,090
Liabilities and Stockholders Equity
Accounts payable		$ 208,080			$ 137,292
Accrued expenses payable		33,660			42,840
Bonds payable		224,400			297,840
Common stock		448,800			357,000
Retained earnings		477,360			215,118
Total		$1,392,300			$1,050,090

Sage Hill, Inc. Income Statement Data For the Year Ended December 31, 2017
Sales revenue				$792,458
Less:
Cost of goods sold		$276,338
Operating expenses, excluding depreciation		25,316
Depreciation expense		94,860
Income tax expense		55,651
Interest expense		9,649
Loss on disposal of plant assets		15,300		477,114
Net income				$ 315,344

Additional information:

1.		New plant assets costing $204,000 were purchased for cash during the year.
2.		Old plant assets having an original cost of $117,300 and accumulated depreciation of $98,940 were sold for $3,060 cash.
3.		Bonds payable matured and were paid off at face value for cash.
4.		A cash dividend of $53,102 was declared and paid during the year.

Further analysis reveals that accounts payable pertain to merchandise creditors. Prepare a statement of cash flows for Sage Hill, Inc. using the direct method.