Question
The following are Sheridan Corp.s comparative balance sheet accounts at December 31, 2017 and 2016, with a column showing the increase (decrease) from 2016 to
The following are Sheridan Corp.s comparative balance sheet accounts at December 31, 2017 and 2016, with a column showing the increase (decrease) from 2016 to 2017.
COMPARATIVE BALANCE SHEETS | |||||||||
2017 | 2016 | Increase (Decrease) | |||||||
Cash | $814,600 | $706,000 | $108,600 | ||||||
Accounts receivable | 1,129,100 | 1,176,600 | (47,500 | ) | |||||
Inventory | 1,861,900 | 1,719,500 | 142,400 | ||||||
Property, plant, and equipment | 3,335,800 | 2,940,300 | 395,500 | ||||||
Accumulated depreciation | (1,159,600 | ) | (1,046,100 | ) | (113,500 | ) | |||
Investment in Myers Co. | 313,100 | 277,300 | 35,800 | ||||||
Loan receivable | 249,200 | 249,200 | |||||||
Total assets | $6,544,100 | $5,773,600 | $770,500 | ||||||
Accounts payable | $1,013,700 | $946,000 | $67,700 | ||||||
Income taxes payable | 29,900 | 50,000 | (20,100 | ) | |||||
Dividends payable | 80,200 | 99,800 | (19,600 | ) | |||||
Lease liabililty | 455,900 | 455,900 | |||||||
Common stock, $1 par | 500,000 | 500,000 | |||||||
Paid-in capital in excess of parcommon stock | 1,502,100 | 1,502,100 | |||||||
Retained earnings | 2,962,300 | 2,675,700 | 286,600 | ||||||
Total liabilities and stockholders equity | $6,544,100 | $5,773,600 | $770,500 |
Additional information:
1. | On December 31, 2016, Sheridan acquired 25% of Myers Co.s common stock for $277,300. On that date, the carrying value of Myerss assets and liabilities, which approximated their fair values, was $1,109,200. Myers reported income of $143,200 for the year ended December 31, 2017. No dividend was paid on Myerss common stock during the year. | |
2. | During 2017, Sheridan loaned $355,300 to TLC Co., an unrelated company. TLC made the first semiannual principal repayment of $106,100, plus interest at 10%, on December 31, 2017. | |
3. | On January 2, 2017, Sheridan sold equipment costing $60,400, with a carrying amount of $38,000, for $40,200 cash. | |
4. | On December 31, 2017, Sheridan entered into a capital lease for an office building. The present value of the annual rental payments is $455,900, which equals the fair value of the building. Sheridan made the first rental payment of $60,200 when due on January 2, 2018. | |
5. | Net income for 2017 was $366,800. | |
6. | Sheridan declared and paid the following cash dividends for 2017 and 2016. |
2017 | 2016 | |||
Declared | December 15, 2017 | December 15, 2016 | ||
Paid | February 28, 2018 | February 28, 2017 | ||
Amount | $80,200 | $99,800 |
Prepare a statement of cash flows for Sheridan Corp. for the year ended December 31, 2017, using the indirect method. (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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