Question - Coronado Inc., a greeting card company, had the following statements prepared as of December 31, 2017.
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CORONADO 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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$6,000
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$7,100
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Accounts receivable
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61,400
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51,500
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Short-term debt investments (available-for-sale)
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34,600
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18,000
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Inventory
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40,300
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60,200
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Prepaid rent
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4,900
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4,000
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Equipment
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152,400
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130,600
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Accumulated depreciation-equipment
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(34,800)
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(25,200)
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Copyrights
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45,700
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49,800
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Total assets
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$310,500
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$296,000
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Accounts payable
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$46,100
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$40,300
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Income taxes payable
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4,000
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6,000
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Salaries and wages payable
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7,900
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4,000
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Short-term loans payable
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8,100
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10,000
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Long-term loans payable
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59,700
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69,600
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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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54,700
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36,100
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Total liabilities & stockholders' equity
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$310,500
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$296,000
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CORONADO INC. INCOME STATEMENT FOR THE YEAR ENDING DECEMBER 31, 2017
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Sales revenue
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$333,450
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Cost of goods sold
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174,300
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Gross profit
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159,150
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Operating expenses
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118,800
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Operating income
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40,350
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Interest expense
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$11,600
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Gain on sale of equipment
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2,000
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9,600
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Income before tax
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30,750
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Income tax expense
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6,150
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Net income
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$24,600
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Additional information:
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1.
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Dividends in the amount of $6,000 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 $19,800 and was 70% depreciated was sold during 2017.
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Prepare a statement of cash flows using the indirect method.