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The following are the financial statements of Pharoah Company. Pharoah Company Comparative Balance Sheets December 31 Assets 2019 Cash $ 38,000 Accounts receivable 32,900 Inventory
The following are the financial statements of Pharoah Company. Pharoah Company Comparative Balance Sheets December 31 Assets 2019 Cash $ 38,000 Accounts receivable 32,900 Inventory 30,600 Equipment 59,400 Accumulated depreciation equipment (30,000) Total $130,900 2018 $ 21,000 19,500 20,300 77,700 (23,200) $115,300 Liabilities and Stockholders' Equity Accounts payable Income taxes payable Bonds payable Common stock Retained earnings Total $ 28,600 7,000 27,600 18,600 49,100 $130,900 $ 16,700 8,100 32,000 13,700 44,800 $115,300 Pharoah Company Income Statement For the Year Ended December 31, 2019 Sales revenue $242,500 Cost of goods sold 176,500 Gross profit 66,000 Operating expenses 23,400 Income from operations 42,600 Interest expense 2,900 Income before income taxes Income tax expense 7,900 Net income $ 31,800 Additional data: 1. Dividends declared and paid were $27,500. 2. During the year, equipment was sold for $9,600 cash. This equipment cost $18,300 originally and had a book value of $9,600 at the time of sale. 3. All depreciation expense, $15,500, is in the operating expenses. 4. All sales and purchases are on account. Prepare a statement of cash flows 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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