Question

The comparative balance sheets for Swifty Corporation show the following information. December 31 2017 2016 Cash $33,800 $13,100 Accounts receivable 12,100 9,900 Inventory 12,000 8,900 Available-for-sale debt investments –0– 3,000 Buildings –0– 29,700 Equipment 44,500 19,800 Patents 5,100 6,200 $107,500 $90,600 Allowance for doubtful accounts $3,100 $4,500 Accumulated depreciation—equipment 2,000 4,500 Accumulated depreciation—building –0– 6,100 Accounts payable 5,100 3,000 Dividends payable –0– 4,900 Notes payable, short-term (nontrade) 3,000 3,900 Long-term notes payable 31,000 25,000 Common stock 43,000 33,000 Retained earnings 20,300 5,700 $107,500 $90,600 Additional data related to 2017 are as follows. 1. Equipment that had cost $11,100 and was 40% depreciated at time of disposal was sold for $2,500. 2. $10,000 of the long-term note payable was paid by issuing common stock. 3. Cash dividends paid were $4,900. 4. On January 1, 2017, the building was completely destroyed by a flood. Insurance proceeds on the building were $30,300 (net of $2,000 taxes). 5. Investments (available-for-sale) were sold at $1,700 above their cost. The company has made similar sales and investments in the past. 6. Cash was paid for the acquisition of equipment. 7. A long-term note for $16,000 was issued for the acquisition of equipment. 8. Interest of $2,000 and income taxes of $6,500 were paid in cash. Prepare a statement of cash flows using the indirect method. Flood damage is unusual and infrequent in that part of the country. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)

Answer 1