Condensed financial data of Cheng Inc. follow.
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CHENG INC. Comparative Balance Sheets December 31 |
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|
Assets |
2014 |
2013 |
|
Cash |
$ 80,800 |
$ 48,400 |
|
Accounts receivable |
92,800 |
33,000 |
|
Inventory |
117,500 |
102,850 |
|
Prepaid expenses |
28,400 |
26,000 |
|
Investments |
143,000 |
114,000 |
|
Equipment |
270,000 |
242,500 |
|
Accumulated depreciation—equipment |
(50,000) |
(52,000) |
|
Total |
$682,500 |
$514,750 |
|
Liabilities and Stockholders” Equity |
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|
Accounts payable |
$112,000 |
$ 67,300 |
|
Accrued expenses payable |
16,500 |
17,000 |
|
Bonds payable |
110,000 |
150,000 |
|
Common stock |
220,000 |
175,000 |
|
Retained earnings |
224,000 |
105,450 |
|
Total |
$682,500 |
$514,750 |
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CHENG INC. Income Statement For the Year Ended December 31, 2014 |
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Sales revenue Less: |
$392,780 |
|
|
Cost of goods sold |
$135,460 |
|
|
Operating expenses, excluding depreciation |
12,410 |
|
|
Depreciation expense |
46,500 |
|
|
Income tax expense |
27,280 |
|
|
Interest expense |
4,730 |
|
|
Loss on disposal of plant assets |
7,500 |
233,880 |
|
Net income |
$158,900 |
|
Additional information:
- New equipment costing $85,000 was purchased for cash during the year.
- Old equipment having an original cost of $57,500 was sold for $1,500 cash.
- Bonds matured and were paid off at face value for cash.
- A cash dividend of $40,350 was declared and paid during the year.
Instructions
Prepare a statement of cash flows using the indirect method.