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Information from the Balance Sheet and statement of income are given below for Martinez Inc., a...

Information from the Balance Sheet and statement of income are given below for Martinez Inc., a private company reporting under ASPE, for the year ended December 31. Martinez Inc.

Comparative Balance Sheet, at December 31 2017 2016

Cash $92,150 $46,150

Accounts receivable 90,700 36,150

Inventory 122,000 102,550

Investments in land 85,100 107,150

Property, plant, and equipment 285,200 201,000

Accumulated depreciation (48,260) (40,000)

$626,890 $454,000

Accounts payable 52,700 48,410

Accrued liabilities 11,700 19,010

Notes payable 140,000 70,000

Common shares 250,000 195,000

Retained earnings 172,490 121,580

$626,890 $454,000

Revenues

Sales 286,500

Gain on Disposal of Equipment 7,750

$294,250

Expenses

Cost of goods sold $95,650

epreciation expense 56,100

Operating expenses 14,270

Income tax expense 36,800

Interest expense 2,710 205,530

Profit $88,720

Additional information:

1.Investments in land were sold at a gain during 2017.

2.Equipment costing $55,200 was sold for $16,110, resulting in a gain.

3.Common shares were issued in exchange for some equipment during the year. No other shares were issued.

4.The remaining purchases of equipment were paid for in cash.

Prepare a cash flow statement for the year ended December 31, 2017 using the direct method.

Expert Solution

ekkarill92 answered 1 year ago

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