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Exercise 23-13 Pronghorn Inc., a greeting card company, had the following statements prepared as of December 31, 2017. PRONGHORN INC. COMPARATIVE BALANCE SHEET AS OF DECEMBER 31, 2017 AND 2016 12/31/17 12/31/16 Cash $6,000 $7,100 Accounts receivable 61,400 51,500 Short-term debt investments (available-forsale) 34,600 18,000 Inventory 40,300 60,200 4,900 4,000 Equipment 152,400 130,600 Accumulated depreciationequipment (34,800 ) (25,200 ) 45,700 49,800 $310,500 $296,000 $46,100 $40,300 Income taxes payable 4,000 6,000 Salaries and wages payable 7,900 4,000 Short-term loans payable 8,100 10,000 Long-term loans payable 59,700 69,600 100,000 100,000 Contributed capital, common stock 30,000 30,000 Retained earnings 54,700 36,100 $310,500 $296,000 Prepaid rent Copyrights Total assets Accounts payable Common stock, $10 par Total liabilities & stockholders' equity PRONGHORN INC. INCOME STATEMENT FOR THE YEAR ENDING DECEMBER 31, 2017 Sales revenue $333,450 Cost of goods sold 174,300 Gross profit 159,150 Operating expenses 118,800 Operating income Interest expense Gain on sale of equipment Income before tax 40,350 $11,600 2,000 9,600 30,750 Income tax expense 6,150 Net income $24,600 Additional information: 1. Dividends in the amount of $6,000 were declared and paid during 2017. 2. Depreciation expense and amortization expense are included in operating expenses. 3. No unrealized gains or losses have occurred on the investments during the year. 4. Equipment that had a cost of $19,800 and was 70% depreciated was sold during 2017. Prepare a statement of cash flows using the direct method. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).) PRONGHORN INC. Statement of Cash Flows $ $ $