Question 4 Culver Company, a major retailer of bicycles and accessories, operates several stores and is a publicly traded company. The comparative balance sheet and income statement for Culver as of May 31, 2017, are as follows. The company is preparing its statement of cash flows. CULVER COMPANY COMPARATIVE BALANCE SHEET AS OF MAY 31 2017 2016 Current assets Cash $28,500 $19,900 Accounts receivable 74,900 58,300 Inventory 221,700 251,100 Prepaid expenses 8,900 7,100 Total current assets 334,000 336,400 Plant assets Plant assets 600,200 497,300 Less: Accumulated depreciationplant assets 149,500 126,200 Net plant assets 450,700 371,100 Total assets $784,700 $707,500 Current liabilities Accounts payable $123,900 $115,300 Salaries and wages payable 47,500 71,500 Interest payable 26,700 24,800 Total current liabilities 198,100 211,600 Long-term debt Bonds payable 70,000 100,000 Total liabilities 268,100 311,600 Stockholders equity Common stock, $10 par 370,000 280,000 Retained earnings 146,600 115,900 Total stockholders equity 516,600 395,900 Total liabilities and stockholders equity $784,700 $707,500 CULVER COMPANY INCOME STATEMENT FOR THE YEAR ENDED MAY 31, 2017 Sales revenue $1,267,200 Cost of goods sold 715,700 Gross profit 551,500 Expenses Salaries and wages expense 253,700 Interest expense 75,500 Depreciation expense 23,300 Other expenses 8,100 Total expenses 360,600 Operating income 190,900 Income tax expense 42,600 Net income $148,300 The following is additional information concerning Culvers transactions during the year ended May 31, 2017. 1. All sales during the year were made on account. 2. All merchandise was purchased on account, comprising the total accounts payable account. 3. Plant assets costing $102,900 were purchased by paying $33,900 in cash and issuing 6,900 shares of stock. 4. The other expenses are related to prepaid items. 5. All income taxes incurred during the year were paid during the year. 6. In order to supplement its cash, Culver issued 2,100 shares of common stock at par value. 7. Cash dividends of $117,600 were declared and paid at the end of the fiscal year. Prepare a statement of cash flows for Culver Company for the year ended May 31, 2017, using the direct method. (A reconciliation of net income to net cash provided is not required.)