Problem 12-7A

The following are the financial statements of Metlock, Inc..

Additional data:

1. Dividends declared and paid were $27,000. 2. During the year, equipment was sold for $9,700 cash. This equipment cost $18,000 originally and had a book value of $9,700 at the time of sale. 3. All depreciation expense, $15,100, is in the operating expenses. 4. All sales and purchases are on account.

Problem 12-7A The following are the financial statements of Metlock, Inc.. Metlock, Inc. Comparative Balance Sheets December 31 Assets 2019 2018 Cash $37,000 $20,500 Accounts receivable 32,900 19,500 Inventory 30,400 20,900 Equipment 59,900 77,900 Accumulated depreciation-equipment - (30,000) (23,200) Total $130,200 $115,600 Liabilities and Stockholders' Equity Accounts payable Income taxes payable Bonds payable Common stock Retained earnings Total $28,100 $16,300 7,500 8,300 27,500 32,900 18,500 13,700 48,600 44,400 $130,200 $115,600 Metlock, Inc. Income Statement For the Year Ended December 31, 2019 Sales revenue $241,500 Cost of goods sold 176,000 Gross profit 65,500 Operating expenses 23,200 Income from operations 42,300 Interest expense 2,600 Income before income taxes 39,700 Income tax expense 8,500 Net income $31,200 Additional data: 1. Dividends declared and paid were $27,000. 2. During the year, equipment was sold for $9,700 cash. This equipment cost $18,000 originally and had a book value of $9,700 at the time of sale. 3. All depreciation expense, $15, 100, is in the operating expenses. 4. All sales and purchases are on account. Prepare a statement of cash flows using the indirect method. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).) Metlock, Inc. Statement of Cash Flows $ Adjustments to reconcile net income to Metlock, Inc. Statement of Cash Flows Adjustments to reconcile net income to > >