Question
Problem 23-2 The comparative balance sheets for Nash Corporation show the following information. December 31 2017 2016 Cash $33,200 $13,000 Accounts receivable 12,200 10,100 Inventory
Problem 23-2
The comparative balance sheets for Nash Corporation show the following information.
December 31 | ||||
2017 | 2016 | |||
Cash | $33,200 | $13,000 | ||
Accounts receivable | 12,200 | 10,100 | ||
Inventory | 12,100 | 8,900 | ||
Available-for-sale debt investments | 0 | 2,900 | ||
Buildings | 0 | 30,100 | ||
Equipment | 45,300 | 20,200 | ||
Patents | 5,000 | 6,300 | ||
$107,800 | $91,500 | |||
Allowance for doubtful accounts | $3,000 | $4,500 | ||
Accumulated depreciationequipment | 2,000 | 4,500 | ||
Accumulated depreciationbuilding | 0 | 6,000 | ||
Accounts payable | 5,000 | 2,900 | ||
Dividends payable | 0 | 5,000 | ||
Notes payable, short-term (nontrade) | 3,000 | 4,000 | ||
Long-term notes payable | 31,000 | 25,000 | ||
Common stock | 43,000 | 33,000 | ||
Retained earnings | 20,800 | 6,600 | ||
$107,800 | $91,500 |
Additional data related to 2017 are as follows.
1. | Equipment that had cost $11,000 and was 40% depreciated at time of disposal was sold for $2,500. | |
2. | $10,000 of the long-term note payable was paid by issuing common stock. | |
3. | Cash dividends paid were $5,000. | |
4. | On January 1, 2017, the building was completely destroyed by a flood. Insurance proceeds on the building were $30,300 (net of $2,000 taxes). | |
5. | Investments (available-for-sale) were sold at $1,700 above their cost. The company has made similar sales and investments in the past. | |
6. | Cash was paid for the acquisition of equipment. | |
7. | A long-term note for $16,000 was issued for the acquisition of equipment. | |
8. | Interest of $2,000 and income taxes of $6,500 were paid in cash. |
Prepare a statement of cash flows using the indirect method. Flood damage is unusual and infrequent in that part of the country. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)
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