| A comparative balance sheet for Riabko Company containing data for the last two years is as follows: |
| Riabko Company Comparative Balance Sheet |
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| This Year |
Last Year |
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| Assets | ||||
| Current assets: | ||||
| Cash and cash equivalents | $ | 92,000 | $ | 66,800 |
| Accounts receivable | 632,000 | 662,500 | ||
| Inventory | 633,200 | 441,000 | ||
| Prepaid expenses | 26,800 | 15,500 | ||
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| Total current assets | 1,384,000 | 1,185,800 | ||
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| Property, plant, and equipment | 2,475,000 | 1,884,000 | ||
| Less accumulated depreciation | 640,200 | 578,900 | ||
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| Net property, plant, and equipment | 1,834,800 | 1,305,100 | ||
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| Long term investments | 124,100 | 193,000 | ||
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| Loans to subsidiaries | 141,000 | 80,500 | ||
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| Total assets | $ | 3,483,900 | $ | 2,764,400 |
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| Liabilities and Stockholders’ equity | ||||
| Current liabilities: | ||||
| Accounts payable | $ | 903,600 | $ | 591,000 |
| Accrued liabilities | 37,600 | 60,900 | ||
| Income taxes payable | 160,300 | 134,800 | ||
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| Total current liabilities | 1,101,500 | 786,700 | ||
| Bonds payable | 725,000 | 463,000 | ||
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| Total liabilities | 1,826,500 | 1,249,700 | ||
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| Stockholders’ equity: | ||||
| Common stock | 1,132,000 | 1,021,000 | ||
| Retained earnings | 525,400 | 493,700 | ||
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| Total stockholders’ equity | 1,657,400 | 1,514,700 | ||
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| Total liabilities and stockholders’ equity | $ | 3,483,900 | $ | 2,764,400 |
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| The following additional information is available about the company’s activities during this year: | |
| a. | The company declared and paid a cash dividend this year. |
| b. | Bonds with a principal balance of $401,000 were repaid during this year. |
| c. | Equipment was sold during this year for $80,500. The equipment had cost $172,000 and had $65,200 in accumulated depreciation on the date of sale. |
| d. | Long term investments were sold during the year for $152,000. These investments had cost $68,900 when purchased several years ago. |
| e. | The subsidiaries did not repay any outstanding loans during the year. |
| f. | Riabko did not repurchase any of its own stock during the year. |
| The company reported net income this year as follows: |
| Riabko Company Income Statement |
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| Sales | $ | 3,420,000 | ||
| Cost of goods sold | 2,120,400 | |||
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| Gross margin | 1,299,600 | |||
| Selling and administrative expenses | 1,041,300 | |||
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| Net operating income | 258,300 | |||
| Non operating items: | ||||
| Gain on sale of investments | $ | 83,100 | ||
| Loss on sale of equipment | 26,300 | 56,800 | ||
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| Income before taxes | 315,100 | |||
| Income taxes | 101,000 | |||
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| Net income | $ | 214,100 | ||
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| Required: | |
| 1. |
Using the indirect method, prepare a statement of cash flows for this year. (Amounts to be deducted and negative amounts should be indicated with a minus sign.) |