Question

The following are Sheridan Corp.’s comparative balance sheet accounts at December 31, 2017 and 2016, with a column showing the increase (decrease) from 2016 to 2017.

COMPARATIVE BALANCE SHEETS
		2017			2016			Increase (Decrease)
Cash		$814,600			$706,000			$108,600
Accounts receivable		1,129,100			1,176,600			(47,500	)
Inventory		1,861,900			1,719,500			142,400
Property, plant, and equipment		3,335,800			2,940,300			395,500
Accumulated depreciation		(1,159,600	)		(1,046,100	)		(113,500	)
Investment in Myers Co.		313,100			277,300			35,800
Loan receivable		249,200			—			249,200
Total assets		$6,544,100			$5,773,600			$770,500
Accounts payable		$1,013,700			$946,000			$67,700
Income taxes payable		29,900			50,000			(20,100	)
Dividends payable		80,200			99,800			(19,600	)
Lease liabililty		455,900			—			455,900
Common stock, $1 par		500,000			500,000			—
Paid-in capital in excess of par—common stock		1,502,100			1,502,100			—
Retained earnings		2,962,300			2,675,700			286,600
Total liabilities and stockholders’ equity		$6,544,100			$5,773,600			$770,500

Additional information:

1.		On December 31, 2016, Sheridan acquired 25% of Myers Co.’s common stock for $277,300. On that date, the carrying value of Myers’s assets and liabilities, which approximated their fair values, was $1,109,200. Myers reported income of $143,200 for the year ended December 31, 2017. No dividend was paid on Myers’s common stock during the year.
2.		During 2017, Sheridan loaned $355,300 to TLC Co., an unrelated company. TLC made the first semiannual principal repayment of $106,100, plus interest at 10%, on December 31, 2017.
3.		On January 2, 2017, Sheridan sold equipment costing $60,400, with a carrying amount of $38,000, for $40,200 cash.
4.		On December 31, 2017, Sheridan entered into a capital lease for an office building. The present value of the annual rental payments is $455,900, which equals the fair value of the building. Sheridan made the first rental payment of $60,200 when due on January 2, 2018.
5.		Net income for 2017 was $366,800.
6.		Sheridan declared and paid the following cash dividends for 2017 and 2016.

		2017		2016
Declared		December 15, 2017		December 15, 2016
Paid		February 28, 2018		February 28, 2017
Amount		$80,200		$99,800

Prepare a statement of cash flows for Sheridan Corp. for the year ended December 31, 2017, using the indirect method. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)

Answer 1