The 2016 and 2015 comparative balance sheets and 2016 income statement of King Supply Corp. follow:

King Supply had no noncash investing and financing transactions during 2016. During the year, there were no sales of land or equipment, no payment of notes payable, no retirements of stock, and no treasury stock transactions.
Requirements
1. Prepare the 2016 statement of cash flows, formatting operating activities by using the indirect method.
2. How will what you learned in this problem help you evaluate an investment?

Transcribed Image Text:

A1 King Supply Corp Comparative Balance Sheets December 31, 2016 Increase (Decrease) 2015 4 Current assets: 17,300$4,000 S 13,300 Cash and cash equivalents 6 Accounts receivable 7 Inventories 8 Prepaid expenses 9 Plant assets: 10 Land 11 Equipment, net 12 Total assets 13 Current liabilities: 14 Accounts payable 15 Salary payable 16 Other accrued liabilities 17 Long-term liabilities: 18 Notes payable 19 Stockholders' equity 20 Common stock, no-par 21 Retained earnings 22 Total liabilities and stockholders' equity 23 56,000 1,800 63,600 55,000 1,000 3,900(2,100) 43,600 66,60052,20014,400 20,000 53,100 49,900 3,200 35,400 $ 26,900 8,500 16,000 22,10024200 2,100) 24,000 8,000 25,000 24,000 88,100 65,900 22,200 9,800 27000 12,800 258,400 185,000 73,400 A1 A. King Supply Corp. Income Statement Year Ended December 31, 2016 2 Revenues: 3 Sales revenue 4 Expenses: 5 Cost of goods sold 6 Salary expense 7 Depreciation expense 8 Other operating expense 9 Interest expense 10 Income tax expense $ 442,000 $186,500 76,000 15000 24,200 29,000 Total expenses 381,000 12 Net income 13