Question - Bridgeport Inc., a greeting card company, had the following statements prepared as of December 31, 2017.
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BRIDGEPORT INC. COMPARATIVE BALANCE SHEET AS OF DECEMBER 31, 2017 AND 2016
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12/31/17
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12/31/16
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Cash
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$5,900
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$6,900
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Accounts receivable
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61,400
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51,200
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Short-term debt investments (available-for-sale)
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34,700
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18,000
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Inventory
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40,200
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59,700
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Prepaid rent
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5,000
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4,100
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Equipment
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152,700
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130,200
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Accumulated depreciation-equipment
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(35,400)
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(25,000)
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Copyrights
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45,700
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49,900
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Total assets
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$310,200
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$295,000
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Accounts payable
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$46,300
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$40,400
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Income taxes payable
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3,900
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6,000
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Salaries and wages payable
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8,100
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3,900
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Short-term loans payable
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8,100
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10,100
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Long-term loans payable
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60,200
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69,400
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Common stock, $10 par
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100,000
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100,000
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Contributed capital, common stock
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30,000
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30,000
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Retained earnings
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53,600
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35,200
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Total liabilities & stockholders' equity
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$310,200
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$295,000
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BRIDGEPORT INC. INCOME STATEMENT FOR THE YEAR ENDING DECEMBER 31, 2017
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Sales revenue
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$335,075
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Cost of goods sold
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175,200
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Gross profit
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159,875
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Operating expenses
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120,100
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Operating income
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39,775
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Interest expense
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$11,400
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Gain on sale of equipment
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2,000
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9,400
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Income before tax
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30,375
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Income tax expense
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6,075
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Net income
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$24,300
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Additional information:
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1.
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Dividends in the amount of $5,900 were declared and paid during 2017.
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2.
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Depreciation expense and amortization expense are included in operating expenses.
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3.
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No unrealized gains or losses have occurred on the investments during the year.
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4.
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Equipment that had a cost of $20,100 and was 70% depreciated was sold during 2017.
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Prepare a statement of cash flows using the direct method.