Question: Dingel Corporation has contracted with you to prepare a statement of cash flows. The controller has provided the following information.
|
|
December 31
|
|
|
2017
|
|
2016
|
| Cash |
|
$38,500
|
|
$13,000
|
| Accounts receivable |
|
12,250
|
|
10,000
|
| Inventory |
|
12,000
|
|
10,000
|
| Equity investments |
|
0
|
|
3,000
|
| Buildings |
|
0
|
|
29,750
|
| Equipment |
|
40,000
|
|
20,000
|
| Copyrights |
|
5,000
|
|
5,250
|
| Totals |
|
$107,750
|
|
$91,000
|
|
|
|
|
|
| Allowance for doubtful accounts |
|
$3,000
|
|
$4,500
|
| Accumulated depreciationâ€"equipment |
|
2,000
|
|
4,500
|
| Accumulated depreciationâ€"buildings |
|
0
|
|
6,000
|
| Accounts payable |
|
5,000
|
|
4,000
|
| Dividends payable |
|
0
|
|
5,000
|
| Notes payable, short-term (nontrade) |
|
3,000
|
|
4,000
|
| Long-term notes payable |
|
36,000
|
|
25,000
|
| Common stock |
|
38,000 |
|
33,000 |
| Retained earnings |
|
20,750
|
|
5,000
|
|
|
$107,750
|
|
$91,000
|
Additional data related to 2017 are as follows.
1. Equipment that had cost $11,000 and was 30% depreciated at time of disposal was sold for $2,500.
2. $5,000 of the long-term note payable was paid by issuing common stock.
3. Cash dividends paid were $5,000.
4. On January 1, 2017, the building was completely destroyed by a flood. Insurance proceeds on the building were $33,000 (net of $4,000 taxes).
5. Equity investments (ownership is less than 20% of total shares) were sold at $1,500 above their cost. No unrealized gains or losses were recorded in 2017.
6. Cash and long-term note for $16,000 were given for the acquisition of equipment.
7. Interest of $2,000 and income taxes of $5,000 were paid in cash.
(a) Use the indirect method to analyze the above information and prepare a statement of cash flows for Dingel.
I feel like I have this question correct, but I'd like a better opinion.