Presented below are data taken from the records of Sandhill Company. December 31, 2017 December 31,...

Presented below are data taken from the records of Sandhill Company. December 31, 2017 December 31, 2016 Cash $15,000 $8,000 Current assets other than cash 84,500 59,900 Long-term investments 10,000 52,800 Plant assets 335,600 217,200 $445,100 $337,900 Accumulated depreciation $20,200 $39,700 Current liabilities 39,600 21,800 Bonds payable 75,600 –0– Common stock 253,300 253,300 Retained earnings 56,400 23,100 $445,100 $337,900 Additional information: 1. Held-to-maturity securities carried at a cost of $42,800 on December 31, 2016, were sold in 2017 for $34,000. The loss (not unusual) was incorrectly charged directly to Retained Earnings. 2. Plant assets that cost $49,900 and were 80% depreciated were sold during 2017 for $7,900. The loss was incorrectly charged directly to Retained Earnings. 3. Net income as reported on the income statement for the year was $57,600. 4. Dividends paid amounted to $13,420. 5. Depreciation charged for the year was $20,420. Prepare a statement of cash flows for the year 2017 using the indirect method

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Expert Solution

Answer:

Sandhill Corporation Statement of Cash flows For the Year Ended December 31, 2017

Cash flows from operating activities
Net Income		$ 46,720	57600+(34000-42800)+(7900-49900*20%)
Adjustments to reconcile net income to ;
Net cash provided by operating activities
Depreciation expense	$ 20,420
Loss on sale of investment	$ 8,800
Loss on sale of plant assets	$ 2,080
Increase in current assets other than cash	$ (24,600)
Increase in current liabilities	$ 17,800
		$ 24,500
*Net cash provided by operating activities*		$ 71,220

Cash flows from investing activities
Cash received from sale of investment	$ 34,000
Cash received from sale of plant assets	$ 7,900
Cash paid for purchase of plant assets	$ (168,300)		217200-335600-49900
*Net cash used by investing activities*		$ (126,400)

Cash flows from financing activities
Cash paid for dividends	$ (13,420)
Cash received from issue bonds	$ 75,600
*Net cash provided by financing activities*		$ 62,180

Net Increase in cash and cash equivalents		$ 7,000
Cash and cash equivalents at beginning of period		$ 8,000
Cash and cash equivalents at end of period		$ 15,000

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