Reference no: EM131598847
Problem - Crane Inc., a greeting card company, had the following statements prepared as of December 31, 2017.
CRANE INC. COMPARATIVE BALANCE SHEET AS OF DECEMBER 31, 2017 AND 2016
12/31/17 12/31/16
Cash $6,000 $6,900
Accounts receivable 62,400 50,800
Short-term debt investments (available-for-sale) 35,100 18,100
Inventory 40,100 60,400
Prepaid rent 5,100 4,000
Equipment 152,400 131,000
Accumulated depreciation-equipment (34,700) (24,800)
Copyrights 45,500 49,900
Total assets $311,900 $296,300
Accounts payable $45,900 $39,900
Income taxes payable 4,000 6,000
Salaries and wages payable 8,100 4,000
Short-term loans payable 8,100 10,000
Long-term loans payable 59,500 68,700
Common stock, $10 par 100,000 100,000
Contributed capital, common stock 30,000 30,000
Retained earnings 56,300 37,700
Total liabilities & stockholders' equity $311,900 $296,300
CRANE INC. INCOME STATEMENT FOR THE YEAR ENDING DECEMBER 31, 2017
Sales revenue $337,125
Cost of goods sold 176,500
Gross profit 160,625
Operating expenses 120,600
Operating income 40,025
Interest expense $11,400
Gain on sale of equipment 2,000 9,400
Income before tax 30,625
Income tax expense 6,125
Net income $24,500
Additional information:
1. Dividends in the amount of $5,900 were declared and paid during 2017.
2. Depreciation expense and amortization expense are included in operating expenses.
3. No unrealized gains or losses have occurred on the investments during the year.
4. Equipment that had a cost of $20,000 and was 70% depreciated was sold during 2017.
Required - Prepare a statement of cash flows using the indirect method.