Condensed comparative balance sheets of ConnieJo Company at December 31, Years 1 and 2, are as follows:
Year 2
|
Year 1
|
Cash |
$45,000
|
$53,500
|
Accounts receivable (net) |
51,300
|
58,000
|
Inventories |
147,200
|
135,000
|
Investments |
0
|
60,000
|
Equipment |
493,000
|
375,000
|
Accumulated depreciation—equipment |
(113,700)
|
(128,000)
|
Total assets |
$622,800
|
$553,500
|
Accounts payable |
$61,500
|
$42,600
|
Bonds payable, due Year 4 |
0
|
100,000
|
Common stock, $10 par |
250,000
|
200,000
|
Paid-in capital in excess of par |
75,000
|
50,000
|
Retained earnings |
236,300
|
160,900
|
Total liabilities and stockholders’ equity |
$622,800
|
$553,500
|
The income statement for Year 2 is as follows:
Sales |
$623,000 |
Cost of merchandise sold |
348,500 |
Gross profit |
$274,500 |
Operating expenses: |
Depreciation expense |
$24,700 |
Other operating expenses |
75,300 |
100,000 |
Income from operations |
$174,500 |
Other revenue and expense: |
Gain on sale of investment |
$5,000 |
Interest expense |
(12,000) |
(7,000) |
Income before income tax |
$167,500 |
Income tax expense |
64,100 |
Net income |
$103,400 |
Additional data for the current year are as follows:
• Fully depreciated equipment costing $39,000 was scrapped, no salvage value, and equipment was purchased for $157,000.
• Bonds payable for $100,000 were retired by payment at their face amount.
• 5,000 shares of common stock were issued at $15 for cash.
• Cash dividends declared and paid, $28,000.
• All sales are on account.
Prepare a statement of cash flows for the year ending December 31, Year 2, using the direct method of reporting cash flows from operating activities. Use the minus sign to indicate cash out flows, cash payments, decreases in cash, or any negative adjustments