The December 31, 2017, balance sheet and the 2018 statement of cash flows for McFarland Corporation follow:

Requirement

1. Prepare the December 31, 2018, balance sheet for McFarland.

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A1 McFarland Corporation Balance Sheet December 31, 2017 2 Assets: Cash $ 17,000 78,400 50,700 2,200 95,600 73,500 $ 317,400 3 Accounts receivable (net) Inventory Prepaid expenses Land 4 7 Machinery and equipment (net) 8 Total assets 9. 10 Liabilities: Accounts payable $ 40,600 8,600 5,500 86,000 140,700 11 Unearned revenue 12 13 Income taxes payable 14 Long-term debt 15 Total liabilities 16 Stockholders' equity: Common stock, no par 17 51,200 125,500 176,700 $ 317,400 Retained earnings 18 Total stockholders' equity 19 20 Total liabilities and stockholders' equity 21 A1 McFarland Corporation Statement of Cash Flows Year Ended December 31, 2018 1 2 Cash flows from operating activities: 3 Net income Adjustments to reconcile net income to net cash $ 18,400 provided by operating activities: 6 Depreciation 7 Loss on sale of equipment 8 Gain on sale of land 9 Change in assets and liabilities: $ 13,900 18,000 (7,100) 10 Decrease in Accounts receivable 50,100 (17,600) 1,300 1,200 (4,100) 11,400 11 Increase in Inventory 12 Decrease in Prepaid expenses 13 Increase in Accounts payable 14 Decrease in Taxes payable 15 Increase in Unearned revenue Net cash provided by operating activities 67,100 $ 85,500 16 17 Cash flows from investing activities: 18 Purchase of equipment (15,000) 14,000 61,000 19 Sale of equipment 20 Sale of land 21 Net cash provided by investing activities 60,000 22 Cash flows from financing activities: 23 Repayment of long-term debt 24 (21,000) 17,700 (5,000) Issuance of common stock Dividends paid (dividends declared, $6,000) 26 25 Net cash used for financing activities 27 Increase (decrease) in cash 28 Cash balance, December 31, 2017 29 Cash balance, December 31, 2018 (8,300) 137,200 17,000 $ 154,200 30