Problem 23-6 Comparative balance sheet accounts of Bridgeport Inc. are presented below. BRIDGEPORT INC. COMPARATIVE BALANCE SHEET ACCOUNTS AS OF DECEMBER 31, 2017 AND 2016 December 31 2017 2016 Debit Accounts Cash Accounts Receivable Inventory Equity investments Machinery Buildings Land $41,600 $34,100 60,400 23,900 38,400 18,900 55,800 7,600 $269,300 $239,100 70,900 30,100 22,400 29,700 67,000 7,600 Credit Accounts Allowance for Doubtful Accounts Accumulated Depreciation-Machinery Accumulated Depreciation-Buildings Accounts Payable Accrued Payables Long-Term Notes Payable Common Stock, no-par Retained Earnings $1,500 2,200 9,000 25,000 2,600 31,200 150,000 125,000 42,600 $269,300 $239,100 $2,200 5,600 13,600 34,800 3,300 21,200 38,600 Additional data (ignoring taxes) 1. Net income for the year was $42,200. 2. Cash dividends declared and paid during the year were $21,200. 3. A 20% stock dividend was declared during the year. $25,000 of retained earnings was capitalized. Equity investments level of ownership is less than 20% that cost $24,800 were sold during the year for $28,500. No unrealized gains and losses were 4. recorded on these investments in 2017 5. Machinery that cost $3,700, on which $750 of depreciation had accumulated, was sold for $2,150 Bridgeport's 2017 income statement follows (ignoring taxes). Sales revenue Less: Cost of goods sold Gross margin Less: Operating expenses (includes $8,750 depreciation and $5,192 bad debts) Income from operations Other: Gain on sale of investments $539,700 378,700 161,000 121,700 39,300 $3,700 Loss on sale of machinery (800 ) 2,900 $42,200 Net income (a) Compute net cash flow from operating activities using the direct method. (Enter negative amounts using either a negative sign preceding the number e.g.-45 or parentheses e.g. (45).) Net cash flow from operating activities (b) Prepare a statement of cash flows using the indirect method. (Show amounts that dec sign e.g.-15,000 or in parenthesis e.g. (15,000).) rease cash flow with either a - BRIDGEPORT INC. Statement of Cash Flows For the Year Ended December 31, 2017 (Indirect Method) Cash Flows from Operating Activities Net Income 42200 BRIDGEPORT INC. Statement of Cash Flows For the Year Ended December 31, 2017 Indirect Method) Cash Flows from Operating Activities Net Income s 42200 Adjustments to reconcile net income to Net Cash Provided by Operating Activities Depreciation Expense Gain on Sale of Investments Loss on Sale of Machinery Increase in Accounts Receivable (Net) Increase in Inventory Increase in Accounts Payable Increase in Accrued Payables Net Cash Provided by Operating Activities Cash Flows from Investing Activities Purchase of Investments Purchase of Machinery Addition to Buildings Sale of Investments Sale of Machinery Net Cash Used by Investing Activities Cash Flows from Financing Activities Reduction in Long-term Note Payable Cash Dividends Paid Net Cash Used by Financing Activities Net Increase in Cash Cash, January 1, 2017 Cash, December 31, 2017