Question

Condensed financial data of Cheng Inc. follow.

CHENG INC. Comparative Balance Sheets December 31
Assets		2020			2019
Cash		$99,700			$48,900
Accounts receivable		93,000			32,700
Inventory		112,800			102,800
Prepaid expenses		29,100			25,900
Investments		139,000			114,900
Equipment		270,600			241,300
Accumulated depreciation-equipment		(46,600	)		(51,100	)
Total		$697,600			$515,400
Liabilities and Stockholders’ Equity
Accounts payable		$112,000			$67,000
Accrued expenses payable		16,100			17,000
Bonds payable		112,700			149,000
Common stock		219,600			175,900
Retained earnings		237,200			106,500
Total		$697,600			$515,400

CHENG INC. Income Statement For the Year Ended December 31, 2020
Sales revenue				$391,100
Less:
Cost of goods sold		$135,500
Operating expenses, excluding depreciation		11,800
Depreciation expense		37,300
Income tax expense		26,000
Interest expense		4,600
Loss on disposal of plant assets		7,000		222,200
Net income				$168,900

Additional information:

1.		New equipment costing $79,400 was purchased for cash during the year.
2.		Old equipment having an original cost of $50,100 was sold for $1,300 cash.
3.		Bonds matured and were paid off at face value for cash.
4.		A cash dividend of $38,200 was declared and paid during the year.

Further analysis reveals that accounts payable pertain to merchandise creditors.

Prepare a statement of cash flows for Cheng Inc. using the direct method. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)

Answer 1