TIMER ES Question 2 Condensed financial data of Cheng Inc. follow. dy 2016 CHENG INC. Comparative Balance Sheets December 31 Assets 2017 Cash $118,000 Accounts receivable 91,600 Inventory 113,000 Prepaid expenses 29,400 Investments 141,000 Equipment 265,700 Accumulated depreciation equipment (46,000) Total $712,700 $47,800 32,200 102,900 26,000 113,500 241,600 (51,400) $512,600 Liabilities and Stockholders' Equity Accounts payable Accrued expenses payable Bonds payable Common stock Retained earnings Total $111,300 16,100 110,700 219,500 255,100 $712,700 $67,900 17,000 149,500 174,200 104,000 $512,600 CHENG INC. Income Statement For the Year Ended December 31, 2017 Sales revenue $391,900 Cost of goods sold Operating expenses, excluding depreciation Depreciation expense Income tax expense Interest expense Loss on disposal of plant asset Net income $135,900 11,600 29,500 26,300 4,400 7,500 215,200 $176.700 Additional information MacBook Air Total $712,700 $512,600 $391,900 CHENG INC. Income Statement For the Year Ended December 31, 2017 Sales revenue Less: Cost of goods sold $135,900 Operating expenses, excluding depreciation 11,600 Depreciation expense 29,500 Income tax expense 26,300 Interest expense 4,400 Loss on disposal of plant assets 7,500 Net income 215,200 $176,700 Additional Information: 1. New equipment costing $79,400 were purchased for cash during the year. 2. Old equipment having an original cost of $55,300 was sold for $12,900 cash. 3. Bonds matured and were paid off at face value for cash. 4. A cash dividend of $25,600 was declared and paid during the year. Prepare a statement of cash flows using the indirect method. (Show amounts that decrease cash flow CHENG INC. Statement of Cash Flows Adjustments to reconcile net income to MacBook Air F1 F2 F3 F4 F5 F6 17 3. Bonds matured and were paid off at face value for cash. 4. A cash dividend of $25,600 was declared and paid during the year. Prepare a statement of cash flows using the Indirect method. (Show amounts that decrease com CHENG INC. Statement of Cash Flows Adjustments to reconcile net income to MacBook Air o o DOO F2 80 F3 : 14 15 F7 ! 1 $ A 2 3 4 % 5 6 & 7