Question

You have completed the field work in connection with your audit of Alexander Corporation for the year ended December 31, 2017. The balance sheet accounts at the beginning and end of the year are shown below.

		Dec. 31, 2017		Dec. 31, 2016			Increase or (Decrease)
Cash		$277,900		$298,000			($20,100	)
Accounts receivable		469,424		353,000			116,424
Inventory		741,700		610,000			131,700
Prepaid expenses		12,000		8,000			4,000
Investment in subsidiary		110,500		0			110,500
Cash surrender value of life insurance		2,304		1,800			504
Machinery		207,000		190,000			17,000
Buildings		535,200		407,900			127,300
Land		52,500		52,500			0
Patents		69,000		64,000			5,000
Copyrights		40,000		50,000			(10,000	)
Bond discount and issue cost		4,502		0			4,502
		$2,522,030		$2,035,200			$486,830
Income taxes payable		$90,250		$79,600			$10,650
Accounts payable		299,280		280,000			19,280
Dividends payable		70,000		0			70,000
Bonds payable—8%		125,000		0			125,000
Bonds payable—12%		0		100,000			(100,000	)
Allowance for doubtful accounts		35,300		40,000			(4,700	)
Accumulated depreciation—buildings		424,000		400,000			24,000
Accumulated depreciation—machinery		173,000		130,000			43,000
Premium on bonds payable		0		2,400			(2,400	)
Common stock—no par		1,176,200		1,453,200			(277,000	)
Paid-in capital in excess of par—common stock		109,000		0			109,000
Retained earnings—unappropriated		20,000		(450,000	)		470,000
		$2,522,030		$2,035,200			$486,830

STATEMENT OF RETAINED EARNINGS FOR THE YEAR ENDED DECEMBER 31, 2017
January	1, 2017		Balance (deficit)		$(450,000	)
March	31, 2017		Net income for first quarter of 2017		25,000
April	1, 2017		Transfer from paid-in capital		425,000
			Balance		0
December	31, 2017		Net income for last three quarters of 2017		90,000
			Dividend declared—payable January 21, 2018		(70,000	)
			Balance		$20,000

Your working papers from the audit contain the following information:

1.		On April 1, 2017, the existing deficit was written off against paid-in capital created by reducing the stated value of the no-par stock.
2.		On November 1, 2017, 29,600 shares of no-par stock were sold for $257,000. The board of directors voted to regard $5 per share as stated capital.
3.		A patent was purchased for $15,000.
4.		During the year, machinery that had a cost basis of $16,400 and on which there was accumulated depreciation of $5,200 was sold for $9,000. No other plant assets were sold during the year.
5.		The 12%, 20-year bonds were dated and issued on January 2, 2005. Interest was payable on June 30 and December 31. They were sold originally at 106. These bonds were redeemed at 100.9 plus accrued interest on March 31, 2017.
6.		The 8%, 40-year bonds were dated January 1, 2017, and were sold on March 31 at 97 plus accrued interest. Interest is payable semiannually on June 30 and December 31. Expense of issuance was $839.
7.		Alexander Corporation acquired 70% control in Crimson Company on January 2, 2017, for $100,000. The income statement of Crimson Company for 2017 shows a net income of $15,000.
8.		Major repairs to buildings of $7,200 were charged to Accumulated Depreciation—Buildings.
9.		Interest paid in 2017 was $10,500 and income taxes paid were $34,000.

From the information given, prepare a statement of cash flows using the indirect method. A worksheet is not necessary, but the principal computations should be supported by schedules or general ledger accounts. The company uses straight-line amortization for bond interest.

I need help with computing the "Supplemental disclosures of cash flow information" part I have to do.

Answer 1