In: Accounting
I. Prepare a statement of cash flow on both a direct and indirect basis | |||||
2017 | 2016 | Change | |||
Assets: | |||||
Cash | 215,000 | 70,000 | 145,000 | ||
Accounts receivable, net | 87,000 | 55,000 | 32,000 | ||
Inventory | 74,000 | 60,000 | 14,000 | ||
Prepaid expenses | 12,000 | 20,000 | -8,000 | ||
Investments | 70,000 | 80,000 | -10,000 | ||
Property, plant & equipment | 750,000 | 550,000 | 200,000 | ||
Accumulated depreciation | -90,000 | -70,000 | -20,000 | ||
Patents | 6,000 | 10,000 | -4,000 | ||
Total Assets | 1,124,000 | 775,000 | 349,000 | ||
Liabilities & Equity | |||||
Accounts payable | 37,000 | 50,000 | -13,000 | ||
Accrued liabilities | 26,000 | 40,000 | -14,000 | ||
Taxes payable | 18,000 | 4,000 | 14,000 | ||
Long-term Notes Payable | 100,000 | - | 100,000 | ||
Common stock | 200,000 | 200,000 | 0 | ||
Additional paid in capital | 336,000 | 286,000 | 50,000 | ||
Retained earnings | 407,000 | 195,000 | 212,000 | ||
Total liabilities and equity | 1,124,000 | 775,000 | 349,000 | ||
Sales | 1,450,000 | ||||
Cost of goods sold | 780,000 | ||||
Gross profit | 670,000 | ||||
Operating expenses | 290,000 | ||||
Pre-tax Operating income | 380,000 | ||||
Gain on sale of investments | 6,000 | ||||
Gain on sale of equipment | 4,000 | ||||
Pre-tax income | 390,000 | ||||
Income taxes | 78,000 | ||||
Net income | 312,000 | ||||
a. Stock option expense of $50,000 was recognized in 2017 | |||||
b. Equipment of $210,000 was purchased using $100,000 note payable and cash | |||||
c. Equipment with cost of $10,000 and book value of $5,000 was sold for $9,000 | |||||
d. Investments with a cost of $10,000 were sold for $16,000 |