Question:
Prepare the statement of cash flows using the indirect method. The income statement for 2017 and the balance sheets for 2017 and 2016 are presented for Hall Industries.
Additional information follows:
a. Sold plant asset for $4,200. The original cost of this plant asset was $10,400 and it had $9,700 of accumulated depreciation associated with it.
b. Paid $4,500 on the bonds payable; issued $39,500 of new bonds payable.
c. Declared and paid cash dividends of $33,100.
d. Purchased new investment for $13,000. Paid cash.
e. Purchased new equipment for $20,400. Paid cash.
Requirement
Prepare a statement of cash flows for Hall Industries, Inc., for the year ended
December 31, 2017, using the indirect method.
Transcribed Image Text:
Hall Industries, Inc. Income Statement For the Year Ended December 31, 2017 953,000 5 Sales revenues 6 Less: Cost of goods sold Gross profit 8 Less operating expenses: Salarles and wages expense 371,000 576,000 187,000 12,000 46,700 84,000 9. Insurance expense 10 Depreclation expense Other operating expenses Total operating expenses 11 12 329,700 246,300 13 14 Operating income 15 Plus other Income and less other expenses: Interest expense Galn on sale of PP&E Total other Income and expenses 5,400 3,500 16 17 18 19 Income before Income taxes 20 Less: Income tax expense 21 Net Income 1,900 244,400 73,320 171,080 22 B. Hall Industries, Inc. Comparative Balance Sheets December 31, 2017 and 2016 Assets 2017 2016 5 Current as sets: Cash 7 Accounts recelvable 8 Inventury 9 Prepald Insurance Total current assets 477,000 S 71,000 334,000 6,500 888,500 S 291,000 122,000 213,000 5,000 631,000 10 11 12 Property, plant, and equipment 13 Less: Accumulated depreclation 600,000 (150,000) 91,000 1,429,500 S 590,000 (113,000) 78,000 1,186,000 14 Investments 15 Total assets 16 Ljabilities 17 18 Current labilities: 19 Accounts payable (Inventory puichases) 20 Wages payable 21 Interest payable 22 Income taxes payable 23 Other accrued expenses payable Total current llabilitles 54,000 S 16,100 1,800 64,320 6,100 142,320 $ 40,000 17,800 500 10,500 3,000 71,800 24 25 26 Long-tem llabilitles 27 Total llabilitles 28 60,000 202,320 $ 25,000 96,800