Question
The Sage Corporation prepared, for 2017 and 2016, the following balance sheet data: December 31 2017 2016 Cash .................................... $ 87,375 $ 63,750 Available-for-sale securities
The Sage Corporation prepared, for 2017 and 2016, the following balance sheet data:
| December 31 | |
| 2017 | 2016 |
Cash .................................... | $ 87,375 | $ 63,750 |
Available-for-sale securities (not cash equivalents) ......................... | 17,250 | 105,000 |
Accounts receivable ..................... | 90,000 | 86,250 |
Merchandise inventory ................... | 187,500 | 163,500 |
Prepaid insurance ....................... | 1,125 | 1,500 |
Land, buildings, and equipment ......... | 1,378,875 | 1,087,500 |
Accumulated depreciation ................ | (558,750) | (498,750) |
Total ................................. | $1,203,375 | $1,008,750 |
|
|
|
Accounts payable ........................ | $ 153,375 | $ 236,250 |
Salaries payable ........................ | 18,750 | 26,250 |
Notes payable--bank (current) ........... | 37,500 | 150,000 |
Bonds payable ........................... | 375,000 | 0 |
Common stock ............................ | 600,000 | 600,000 |
Retained earnings (deficit) ............. | 18,750 | (3,750) |
Total ................................. | $1,203,375 | $1,008,750 |
Additional information:
(a) | Sold available-for-sale securities (not cash equivalents) costing $87,750 for $90,000. |
(b) | Equipment costing $18,750 with a book value of $3,750 was sold for $4,500. |
(c) | Issued 8% bonds payable at par, $375,000. |
(d) | Purchased new equipment for cash, $310,125. |
(e) | Paid cash dividends of $22,500 during the year. |
(f) | Net income for 2017 was $45,000. |
(g) | Proceeds from the notes payable were used for operating purposes. |
Prepare a cash flow statement for Sage Corporation for 2017, using the indirect method.
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