Question 6 Presented below is the comparative balance sheet for Pharoah Inc., a private company reporting under ASPE, at December 31, 2017 and 2016: PHAROAH INC. Balance Sheet December 31 Assets Cash Accounts receivable Inventory Long-term investment Property, plant and equipment Less: Accumulated depreciation 2017 $59,200 101,000 205,000 101,500 535,000 (162,500) $839,200 2016 $98,000 75,000 155,500 0 460,000 (140,000) $648,500 Study Liabilities and Shareholders' Equity Accounts payable Dividends payable Income tax payable Long-term notes payable Common shares Retained earnings $57,500 6,000 14,000 25,000 630,000 106,700 5839,200 $47,000 0 15,000 0 525,000 61,500 5648,500 PHAROAH INC. Income Statement Year Ended December 31, 2017 Sales 5655,200 Cost of goods sold 432,000 Gross profit 223,200 Operating expenses $147,500 PRINTER VERSION BACK PHAROAH INC. Income Statement Year Ended December 31, 2017 Sales $655,200 Cost of goods sold 432,000 Gross profit 223,200 Operating expenses $147,500 Loss on sale of equipment 3,000 150,500 Profit from operations 72,700 Interest expense 3,000 Interest revenue (4,500) (1,500) Profit before income tax 74,200 Income tax expense 14,000 Profit $60,200 Additional Information 1. Cash dividends of $15,000 were declared 2. A long-term investment was acquired for cash at a cost of $101,500. 3. Depreciation expenses included in the operating expenses 4. The company issued 10,500 common shares for cash on March 2, 2017. The fair value of the shares was $10 per share. The proceeds were used to purchase additional equipment 5. Equipment that originally cost $30,000 was sold during the year for cash. The equipment had a carrying value of $9,000 at the time of sale 6. The company inued a note payable for $20,000 and repaid $3,000 by yo end. Prepare a cash now statement for the year using the Indirect method (Show amounts that decrease can now with other asyn v -15,000 or in parenthese.. (15,000)) PHAROAH INC. Cash Flow Statement - Indirect Method PHARUAN INC. Cash Flow Statement - Indirect Method Adjustments to reconcile profit to $