The comparative balance sheets for 2016 and 2015 and the income statement for 2016 are given below for Arduous Company.
The comparative balance sheets for 2016 and 2015 and the income statement for 2016 are given below for Arduous Company. Additional information from Arduous’s accounting records is provided also.
Comparative Balance Sheets
December 31, 2016, and 2015
($ in millions)
|Investment revenue receivable||21||18|
|Buildings and equipment||426||428|
|Less: Accumulated depreciation||(110)||(148)|
|Bond interest payable||23||18|
|Income tax payable||26||30|
|Deferred income tax liability||39||22|
|Less: Discount on bonds||(36)||(42)|
|Paid-in capital—excess of par||114||99|
|Less: Treasury stock||(23)||0|
For Year Ended December 31, 2016
($ in millions)
|Revenues and gain:|
|Gain on sale of treasury bills||3||$||579|
|Expenses and loss:|
|Cost of goods sold||194|
|Patent amortization expense||3|
|Bond interest expense||42|
|Loss on machine damage||31|
|Income tax expense||50||439|
|Additional information from the accounting records:|
Investment revenue includes Arduous Company’s $21 million shares of the net income of Demur Company, an equity method investee.
Treasury bills were sold during 2016 at a gain of $3 million. Arduous Company classifies its investments in Treasury bills as cash equivalents.
A machine originally costing $98 million that was one-half depreciated was rendered unusable by a flood. Most major components of the machine were unharmed and were sold for $18 million.
Temporary differences between pretax accounting income and taxable income caused the deferred income tax liability to increase by $17 million.
The preferred stock of Tory Corporation was purchased for $39 million as a long-term investment.
Land costing $60 million was acquired by issuing $30 million cash and a 10%, four-year, $30 million note payable to the seller.
The right to use a building was acquired with a 15-year lease agreement; the present value of lease payments, is $96 million.
$74 million of bonds were retired at maturity.
|i.||In February, Arduous issued a 6% stock dividend (4 million shares). The market price of the $6 par value common stock was $8.50 per share at that time.|
On April, 1 million shares of common stock were repurchased as treasury stock at a cost of $23 million.
Prepare the statement of cash flows for Arduous Company using the indirect method. (Amounts to be deducted should be indicated with a minus sign. Do not round your intermediate calculations. Enter your answers in millions (i.e., 10,000,000 should be entered as 10.).)