Problem 23-8

Comparative balance sheet accounts of Windsor Company are presented below.

WINDSOR COMPANY COMPARATIVE BALANCE SHEET ACCOUNTS AS OF DECEMBER 31

Debit Balances

2017

2016

Cash

$70,600

$51,400

Accounts Receivable

154,400

130,000

Inventory

75,800

60,500

Debt investments (available-for-sale)

54,700

84,900

Equipment

69,800

47,500

Buildings

144,400

144,400

Land

40,100

24,800

Totals

$609,800

$543,500

Credit Balances

Allowance for Doubtful Accounts

$10,100

$8,100

Accumulated DepreciationEquipment

21,000

14,200

Accumulated DepreciationBuildings

37,300

28,200

Accounts Payable

66,600

59,800

Income Taxes Payable

11,900

9,900

Long-Term Notes Payable

62,000

70,000

Common Stock

310,000

260,000

Retained Earnings

90,900

93,300

Totals

$609,800

$543,500

Additional data:

1.Equipment that cost $10,100 and was 60% depreciated was sold in 2017.

2.Cash dividends were declared and paid during the year.

3.Common stock was issued in exchange for land.

4.Investments that cost $34,600 were sold during the year.

5.There were no write-offs of uncollectible accounts during the year.

Windsors 2017 income statement is as follows. Sales revenue

$955,700

Less: Cost of goods sold

604,800

Gross profit

350,900

Less: Operating expenses (includes depreciation expense and bad debt expense)

250,200

Income from operations

100,700

Other revenues and expenses

Gain on sale of investments

$15,100

Loss on sale of equipment

(3,000)

12,100

Income before taxes

112,800

Income taxes

45,200

Net income

$67,600

(a) Compute net cash provided by operating activities under the direct method. (b) Prepare a statement of cash flows using the indirect method.