Reference no: EM132490323
Pronghorn Inc., a greeting card company, had the following statements prepared as of December 31, 2017.
PRONGHORN INC.
COMPARATIVE BALANCE SHEET
AS OF DECEMBER 31, 2017 AND 2016
12/31/17 12/31/16
Cash $5,900 $7,000
Accounts receivable 61,500 51,300
Short-term debt investments
(available-for-sale) 35,000 17,800
Inventory 40,400 60,200
Prepaid rent 5,000 4,000
Equipment 153,400 129,000
Accumulated depreciation-
equipment (35,100) (25,100)
Copyrights 46,300 49,600
Total assets $312,400 $293,800
Accounts payable $46,500 $40,200
Income taxes payable 4,100 6,000
Salaries and wages payable 8,100 4,000
Short-term loans payable 7,900 10,000
Long-term loans payable 60,200 68,700
Common stock, $10 par 100,000 100,000
Contributed capital, common stock. 30,000 30,000
Retained earnings 55,600 34,900
Total liabilities & stockholders' equity $312,400 $293,800
PRONGHORN INC.
INCOME STATEMENT
FOR THE YEAR ENDING DECEMBER 31, 2017
Sales revenue $338,750
Cost of goods sold 176,400
Gross profit 162,350
Operating expenses 119,600
Operating income 42,750
Interest expense $11,500
Gain on sale of equipment 2,000. 9,500
Income before tax 33,250
Income tax expense 6,650
Net income $26,600
Additional information:
Point 1. Dividends in the amount of $5,900 were declared and paid during 2017.
Point 2. Depreciation expense and amortization expense are included in operating expenses.
Point 3. No unrealized gains or losses have occurred on the investments during the year.
Point 4. Equipment that had a cost of $19,900 and was 70% depreciated was sold during 2017.
Question 1: Please help with a statement of cash flows using the indirect method. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)