Condensed financial data of Vaughn Manufacturing follow. 2016 Vaughn Manufacturing Comparative Balance Sheets December 31 Assets 2017 Cash $ 109,080 Accounts receivable 118,530 Inventory 151,875 Prepaid expenses 38,340 Long-term investments 186,300 Plant assets 384,750 Accumulated depreciation (67,500) Total $921,375 $ 65,340 51,300 138,848 35,100 147,150 327,375 (70,200) $694,913 Liabilities and Stockholders' Equity Accounts payable Accrued expenses payable Bonds payable Common stock Retained earnings Total $ 137,700 22,275 148,500 297,000 315,900 $921,375 $ 90,855 28,350 197,100 236,250 142,358 $694,913 $524,421 Vaughn Manufacturing Income Statement Data For the Year Ended December 31, 2017 Sales revenue Less: Cost of goods sold $182,871 Operating expenses, excluding depreciation 16,754 Depreciation expense 62,775 Income tax expense 36,828 Interest expense 6,386 Loss on disposal of plant assets 10,125 Net income 315,739 $ 208,682 Additional information: 1. 2. 3. New plant assets costing $135,000 were purchased for cash during the year. Old plant assets having an original cost of $77,625 and accumulated depreciation of $65,475 were sold for $2, Bonds payable matured and were paid off at face value for cash. A cash dividend of $35,140 was declared and paid during the year. 4. Prepare a statement of cash flows using the indirect method. (Show amounts that decrease cash flow with either a - signe. in parenthesis e.g. (15,000).) Vaughn Manufacturing Statement of Cash Flows For the Year Ended December 31, 2017 Cash Flows from Operating Activities Net Income A $ 208682 Adjustments to reconcile net income to Net Cash Provided by Operating Activities Decrease in Accrued Expenses Payable $ 62775 Increase in Inventory A 10125 Increase in Accounts Receivable A (67230) Depreciation Expense (13027) Loss on Disposal of Plant Assets (3240) Increase in Prepaid Expenses 46845 Increase in Accounts Payable (6075) 30173 Net Cash Provided by Operating Activities - 238855 Additional information: 1. 2. 3. New plant assets costing $135,000 were purchased for cash during the year. Old plant assets having an original cost of $77,625 and accumulated depreciation of $65,475 were sold for $2, Bonds payable matured and were paid off at face value for cash. A cash dividend of $35,140 was declared and paid during the year. 4. Prepare a statement of cash flows using the indirect method. (Show amounts that decrease cash flow with either a - signe. in parenthesis e.g. (15,000).) Vaughn Manufacturing Statement of Cash Flows For the Year Ended December 31, 2017 Cash Flows from Operating Activities Net Income A $ 208682 Adjustments to reconcile net income to Net Cash Provided by Operating Activities Decrease in Accrued Expenses Payable $ 62775 Increase in Inventory A 10125 Increase in Accounts Receivable A (67230) Depreciation Expense (13027) Loss on Disposal of Plant Assets (3240) Increase in Prepaid Expenses 46845 Increase in Accounts Payable (6075) 30173 Net Cash Provided by Operating Activities - 238855 Cash Flows from Investing Activities Purchase of Investments (39150) Purchase of Plant Assets (135000) Sale of Plant Assets 4 2025 Net Cash used by Investing Activities a (172125) Cash Flows from Financing Activities Redemption of Bonds (48600) Sale of Common Stock 2 60750 Payment of Cash Dividends 4 (35140) Net Cash used by Financing Activities a (22990) Net Increase in Cash 43740 Cash at Beginning of Period 65340 Cash at End of Period $ 109080