Comprehensive The following are Farrell Corporation's balance sheets as of December 31, 2016, and 2015, and...

 

 

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Comprehensive The following are Farrell Corporation's balance sheets as of December 31, 2016, and 2015, and the statement of income and retained earnings for the year ended December 31, 2016: Balance Sheets December 31 Increase 2016 2015 (Decrease) Assets Cash $ 225,000 295,000 549,000 73,000 350,000 624,000 (139,000) 16,000 $1,993,000 $ 180,000 305,000 431,000 60,000 200,000 606,000 (107,000) 20,000 $1,695,000 $ 45,000 (10,000) 118,000 13,000 150,000 18,000 (32,000) (4,000) $298,000 Accounts receivable, net Inventories Investment in Hall Inc. at equity Land Plant and equipment Less: Accumulated depreciation Patent Total Assets Liabilities and Shareholders' Equity Accounts payable and accrued expenses Note payable, long-term Bonds payable Deferred taxes payable Common stock, $io par Additional paid-in capital Retained earnings Treasury stock, at cost Total Liabilities and Shareholders' Equity $ 604,000 150,000 160,000 41,000 410,000 196,000 432,000 $ 563,000 210,000 30,000 400,000 175,000 334,000 (17,000) $1,695,000 $ 41,000 150,000 (50,000) 11,000 10,000 21,000 98,000 17,000 $298,000 $1,993,000 Statement of Income and Retained Earnings For the Year Ended December 31, 2016 Net sales Operating expenses: Cost of sales Selling and administrative expenses Depreciation $1,950,000 $1,150,000 505,000 53,000 $1,708,000 $ 242,000 Operating income Other (income) expense: Interest expense Equity in net income of Hall Inc. Loss on sale of equipment Amortization of patent $ 15,000 (13,000) 5,000 4,000 $ 11,000 231,000 Income before income taxes Income taxes: Current Deferred Provision for income taxes Net income Retained earnings, January 1, 2016 $ 79,000 11,000 90,000 $ 141,000 334,000 $ 475,000 43,000 $ 432,000 Cash dividends, paid August 13, 2016 Retained earnings, Docember 31, 2016 Additional information: On January 2, 2016, Farrell sold equipment costing $45,000, with a book value of $24,000, for $19,000 cash. b. On April 2, 2016, Farrell issued 1,000 shares of common stock for $23,000 cash. On May 14, 2016, Farrell sold all of its treasury stock for $25,000 cash. d. On June 1, 2016, Farrell paid S50,000 to retire bonds with a face value (and book value) of $50,000. e. On July 2, 2016, Farrell purchased equipment for $63,000 cash. f. On December 31, 2016, land with a fair market value of $150,000 was purchased through the issuance of a long term note in the amount of $150,000. The note bears interest at the rate of 15% and is due on December 31, 2018. g. Deferred taxes payable represent temporary differences relating to the use of accelerated depreciation methods for income tax reporting and the straight-line method for financial statement reporting. a. c. Required: 1. Prepare a spreadsheet to support a statement of cash flows for Farrell for the year ended December 31, 2016, based on the preceding information. 2. Prepare the statement of cash flows. Comprehensive The following are Farrell Corporation's balance sheets as of December 31, 2016, and 2015, and the statement of income and retained earnings for the year ended December 31, 2016: Balance Sheets December 31 Increase 2016 2015 (Decrease) Assets Cash $ 225,000 295,000 549,000 73,000 350,000 624,000 (139,000) 16,000 $1,993,000 $ 180,000 305,000 431,000 60,000 200,000 606,000 (107,000) 20,000 $1,695,000 $ 45,000 (10,000) 118,000 13,000 150,000 18,000 (32,000) (4,000) $298,000 Accounts receivable, net Inventories Investment in Hall Inc. at equity Land Plant and equipment Less: Accumulated depreciation Patent Total Assets Liabilities and Shareholders' Equity Accounts payable and accrued expenses Note payable, long-term Bonds payable Deferred taxes payable Common stock, $io par Additional paid-in capital Retained earnings Treasury stock, at cost Total Liabilities and Shareholders' Equity $ 604,000 150,000 160,000 41,000 410,000 196,000 432,000 $ 563,000 210,000 30,000 400,000 175,000 334,000 (17,000) $1,695,000 $ 41,000 150,000 (50,000) 11,000 10,000 21,000 98,000 17,000 $298,000 $1,993,000 Statement of Income and Retained Earnings For the Year Ended December 31, 2016 Net sales Operating expenses: Cost of sales Selling and administrative expenses Depreciation $1,950,000 $1,150,000 505,000 53,000 $1,708,000 $ 242,000 Operating income Other (income) expense: Interest expense Equity in net income of Hall Inc. Loss on sale of equipment Amortization of patent $ 15,000 (13,000) 5,000 4,000 $ 11,000 231,000 Income before income taxes Income taxes: Current Deferred Provision for income taxes Net income Retained earnings, January 1, 2016 $ 79,000 11,000 90,000 $ 141,000 334,000 $ 475,000 43,000 $ 432,000 Cash dividends, paid August 13, 2016 Retained earnings, Docember 31, 2016 Additional information: On January 2, 2016, Farrell sold equipment costing $45,000, with a book value of $24,000, for $19,000 cash. b. On April 2, 2016, Farrell issued 1,000 shares of common stock for $23,000 cash. On May 14, 2016, Farrell sold all of its treasury stock for $25,000 cash. d. On June 1, 2016, Farrell paid S50,000 to retire bonds with a face value (and book value) of $50,000. e. On July 2, 2016, Farrell purchased equipment for $63,000 cash. f. On December 31, 2016, land with a fair market value of $150,000 was purchased through the issuance of a long term note in the amount of $150,000. The note bears interest at the rate of 15% and is due on December 31, 2018. g. Deferred taxes payable represent temporary differences relating to the use of accelerated depreciation methods for income tax reporting and the straight-line method for financial statement reporting. a. c. Required: 1. Prepare a spreadsheet to support a statement of cash flows for Farrell for the year ended December 31, 2016, based on the preceding information. 2. Prepare the statement of cash flows. Comprehensive The following are Farrell Corporation's balance sheets as of December 31, 2016, and 2015, and the statement of income and retained earnings for the year ended December 31, 2016: Balance Sheets December 31 Increase 2016 2015 (Decrease) Assets Cash $ 225,000 295,000 549,000 73,000 350,000 624,000 (139,000) 16,000 $1,993,000 $ 180,000 305,000 431,000 60,000 200,000 606,000 (107,000) 20,000 $1,695,000 $ 45,000 (10,000) 118,000 13,000 150,000 18,000 (32,000) (4,000) $298,000 Accounts receivable, net Inventories Investment in Hall Inc. at equity Land Plant and equipment Less: Accumulated depreciation Patent Total Assets Liabilities and Shareholders' Equity Accounts payable and accrued expenses Note payable, long-term Bonds payable Deferred taxes payable Common stock, $io par Additional paid-in capital Retained earnings Treasury stock, at cost Total Liabilities and Shareholders' Equity $ 604,000 150,000 160,000 41,000 410,000 196,000 432,000 $ 563,000 210,000 30,000 400,000 175,000 334,000 (17,000) $1,695,000 $ 41,000 150,000 (50,000) 11,000 10,000 21,000 98,000 17,000 $298,000 $1,993,000 Statement of Income and Retained Earnings For the Year Ended December 31, 2016 Net sales Operating expenses: Cost of sales Selling and administrative expenses Depreciation $1,950,000 $1,150,000 505,000 53,000 $1,708,000 $ 242,000 Operating income Other (income) expense: Interest expense Equity in net income of Hall Inc. Loss on sale of equipment Amortization of patent $ 15,000 (13,000) 5,000 4,000 $ 11,000 231,000 Income before income taxes Income taxes: Current Deferred Provision for income taxes Net income Retained earnings, January 1, 2016 $ 79,000 11,000 90,000 $ 141,000 334,000 $ 475,000 43,000 $ 432,000 Cash dividends, paid August 13, 2016 Retained earnings, Docember 31, 2016 Additional information: On January 2, 2016, Farrell sold equipment costing $45,000, with a book value of $24,000, for $19,000 cash. b. On April 2, 2016, Farrell issued 1,000 shares of common stock for $23,000 cash. On May 14, 2016, Farrell sold all of its treasury stock for $25,000 cash. d. On June 1, 2016, Farrell paid S50,000 to retire bonds with a face value (and book value) of $50,000. e. On July 2, 2016, Farrell purchased equipment for $63,000 cash. f. On December 31, 2016, land with a fair market value of $150,000 was purchased through the issuance of a long term note in the amount of $150,000. The note bears interest at the rate of 15% and is due on December 31, 2018. g. Deferred taxes payable represent temporary differences relating to the use of accelerated depreciation methods for income tax reporting and the straight-line method for financial statement reporting. a. c. Required: 1. Prepare a spreadsheet to support a statement of cash flows for Farrell for the year ended December 31, 2016, based on the preceding information. 2. Prepare the statement of cash flows. Comprehensive The following are Farrell Corporation's balance sheets as of December 31, 2016, and 2015, and the statement of income and retained earnings for the year ended December 31, 2016: Balance Sheets December 31 Increase 2016 2015 (Decrease) Assets Cash $ 225,000 295,000 549,000 73,000 350,000 624,000 (139,000) 16,000 $1,993,000 $ 180,000 305,000 431,000 60,000 200,000 606,000 (107,000) 20,000 $1,695,000 $ 45,000 (10,000) 118,000 13,000 150,000 18,000 (32,000) (4,000) $298,000 Accounts receivable, net Inventories Investment in Hall Inc. at equity Land Plant and equipment Less: Accumulated depreciation Patent Total Assets Liabilities and Shareholders' Equity Accounts payable and accrued expenses Note payable, long-term Bonds payable Deferred taxes payable Common stock, $io par Additional paid-in capital Retained earnings Treasury stock, at cost Total Liabilities and Shareholders' Equity $ 604,000 150,000 160,000 41,000 410,000 196,000 432,000 $ 563,000 210,000 30,000 400,000 175,000 334,000 (17,000) $1,695,000 $ 41,000 150,000 (50,000) 11,000 10,000 21,000 98,000 17,000 $298,000 $1,993,000 Statement of Income and Retained Earnings For the Year Ended December 31, 2016 Net sales Operating expenses: Cost of sales Selling and administrative expenses Depreciation $1,950,000 $1,150,000 505,000 53,000 $1,708,000 $ 242,000 Operating income Other (income) expense: Interest expense Equity in net income of Hall Inc. Loss on sale of equipment Amortization of patent $ 15,000 (13,000) 5,000 4,000 $ 11,000 231,000 Income before income taxes Income taxes: Current Deferred Provision for income taxes Net income Retained earnings, January 1, 2016 $ 79,000 11,000 90,000 $ 141,000 334,000 $ 475,000 43,000 $ 432,000 Cash dividends, paid August 13, 2016 Retained earnings, Docember 31, 2016 Additional information: On January 2, 2016, Farrell sold equipment costing $45,000, with a book value of $24,000, for $19,000 cash. b. On April 2, 2016, Farrell issued 1,000 shares of common stock for $23,000 cash. On May 14, 2016, Farrell sold all of its treasury stock for $25,000 cash. d. On June 1, 2016, Farrell paid S50,000 to retire bonds with a face value (and book value) of $50,000. e. On July 2, 2016, Farrell purchased equipment for $63,000 cash. f. On December 31, 2016, land with a fair market value of $150,000 was purchased through the issuance of a long term note in the amount of $150,000. The note bears interest at the rate of 15% and is due on December 31, 2018. g. Deferred taxes payable represent temporary differences relating to the use of accelerated depreciation methods for income tax reporting and the straight-line method for financial statement reporting. a. c. Required: 1. Prepare a spreadsheet to support a statement of cash flows for Farrell for the year ended December 31, 2016, based on the preceding information. 2. Prepare the statement of cash flows. Comprehensive The following are Farrell Corporation's balance sheets as of December 31, 2016, and 2015, and the statement of income and retained earnings for the year ended December 31, 2016: Balance Sheets December 31 Increase 2016 2015 (Decrease) Assets Cash $ 225,000 295,000 549,000 73,000 350,000 624,000 (139,000) 16,000 $1,993,000 $ 180,000 305,000 431,000 60,000 200,000 606,000 (107,000) 20,000 $1,695,000 $ 45,000 (10,000) 118,000 13,000 150,000 18,000 (32,000) (4,000) $298,000 Accounts receivable, net Inventories Investment in Hall Inc. at equity Land Plant and equipment Less: Accumulated depreciation Patent Total Assets Liabilities and Shareholders' Equity Accounts payable and accrued expenses Note payable, long-term Bonds payable Deferred taxes payable Common stock, $io par Additional paid-in capital Retained earnings Treasury stock, at cost Total Liabilities and Shareholders' Equity $ 604,000 150,000 160,000 41,000 410,000 196,000 432,000 $ 563,000 210,000 30,000 400,000 175,000 334,000 (17,000) $1,695,000 $ 41,000 150,000 (50,000) 11,000 10,000 21,000 98,000 17,000 $298,000 $1,993,000 Statement of Income and Retained Earnings For the Year Ended December 31, 2016 Net sales Operating expenses: Cost of sales Selling and administrative expenses Depreciation $1,950,000 $1,150,000 505,000 53,000 $1,708,000 $ 242,000 Operating income Other (income) expense: Interest expense Equity in net income of Hall Inc. Loss on sale of equipment Amortization of patent $ 15,000 (13,000) 5,000 4,000 $ 11,000 231,000 Income before income taxes Income taxes: Current Deferred Provision for income taxes Net income Retained earnings, January 1, 2016 $ 79,000 11,000 90,000 $ 141,000 334,000 $ 475,000 43,000 $ 432,000 Cash dividends, paid August 13, 2016 Retained earnings, Docember 31, 2016 Additional information: On January 2, 2016, Farrell sold equipment costing $45,000, with a book value of $24,000, for $19,000 cash. b. On April 2, 2016, Farrell issued 1,000 shares of common stock for $23,000 cash. On May 14, 2016, Farrell sold all of its treasury stock for $25,000 cash. d. On June 1, 2016, Farrell paid S50,000 to retire bonds with a face value (and book value) of $50,000. e. On July 2, 2016, Farrell purchased equipment for $63,000 cash. f. On December 31, 2016, land with a fair market value of $150,000 was purchased through the issuance of a long term note in the amount of $150,000. The note bears interest at the rate of 15% and is due on December 31, 2018. g. Deferred taxes payable represent temporary differences relating to the use of accelerated depreciation methods for income tax reporting and the straight-line method for financial statement reporting. a. c. Required: 1. Prepare a spreadsheet to support a statement of cash flows for Farrell for the year ended December 31, 2016, based on the preceding information. 2. Prepare the statement of cash flows. Comprehensive The following are Farrell Corporation's balance sheets as of December 31, 2016, and 2015, and the statement of income and retained earnings for the year ended December 31, 2016: Balance Sheets December 31 Increase 2016 2015 (Decrease) Assets Cash $ 225,000 295,000 549,000 73,000 350,000 624,000 (139,000) 16,000 $1,993,000 $ 180,000 305,000 431,000 60,000 200,000 606,000 (107,000) 20,000 $1,695,000 $ 45,000 (10,000) 118,000 13,000 150,000 18,000 (32,000) (4,000) $298,000 Accounts receivable, net Inventories Investment in Hall Inc. at equity Land Plant and equipment Less: Accumulated depreciation Patent Total Assets Liabilities and Shareholders' Equity Accounts payable and accrued expenses Note payable, long-term Bonds payable Deferred taxes payable Common stock, $io par Additional paid-in capital Retained earnings Treasury stock, at cost Total Liabilities and Shareholders' Equity $ 604,000 150,000 160,000 41,000 410,000 196,000 432,000 $ 563,000 210,000 30,000 400,000 175,000 334,000 (17,000) $1,695,000 $ 41,000 150,000 (50,000) 11,000 10,000 21,000 98,000 17,000 $298,000 $1,993,000 Statement of Income and Retained Earnings For the Year Ended December 31, 2016 Net sales Operating expenses: Cost of sales Selling and administrative expenses Depreciation $1,950,000 $1,150,000 505,000 53,000 $1,708,000 $ 242,000 Operating income Other (income) expense: Interest expense Equity in net income of Hall Inc. Loss on sale of equipment Amortization of patent $ 15,000 (13,000) 5,000 4,000 $ 11,000 231,000 Income before income taxes Income taxes: Current Deferred Provision for income taxes Net income Retained earnings, January 1, 2016 $ 79,000 11,000 90,000 $ 141,000 334,000 $ 475,000 43,000 $ 432,000 Cash dividends, paid August 13, 2016 Retained earnings, Docember 31, 2016 Additional information: On January 2, 2016, Farrell sold equipment costing $45,000, with a book value of $24,000, for $19,000 cash. b. On April 2, 2016, Farrell issued 1,000 shares of common stock for $23,000 cash. On May 14, 2016, Farrell sold all of its treasury stock for $25,000 cash. d. On June 1, 2016, Farrell paid S50,000 to retire bonds with a face value (and book value) of $50,000. e. On July 2, 2016, Farrell purchased equipment for $63,000 cash. f. On December 31, 2016, land with a fair market value of $150,000 was purchased through the issuance of a long term note in the amount of $150,000. The note bears interest at the rate of 15% and is due on December 31, 2018. g. Deferred taxes payable represent temporary differences relating to the use of accelerated depreciation methods for income tax reporting and the straight-line method for financial statement reporting. a. c. Required: 1. Prepare a spreadsheet to support a statement of cash flows for Farrell for the year ended December 31, 2016, based on the preceding information. 2. Prepare the statement of cash flows. Comprehensive The following are Farrell Corporation's balance sheets as of December 31, 2016, and 2015, and the statement of income and retained earnings for the year ended December 31, 2016: Balance Sheets December 31 Increase 2016 2015 (Decrease) Assets Cash $ 225,000 295,000 549,000 73,000 350,000 624,000 (139,000) 16,000 $1,993,000 $ 180,000 305,000 431,000 60,000 200,000 606,000 (107,000) 20,000 $1,695,000 $ 45,000 (10,000) 118,000 13,000 150,000 18,000 (32,000) (4,000) $298,000 Accounts receivable, net Inventories Investment in Hall Inc. at equity Land Plant and equipment Less: Accumulated depreciation Patent Total Assets Liabilities and Shareholders' Equity Accounts payable and accrued expenses Note payable, long-term Bonds payable Deferred taxes payable Common stock, $io par Additional paid-in capital Retained earnings Treasury stock, at cost Total Liabilities and Shareholders' Equity $ 604,000 150,000 160,000 41,000 410,000 196,000 432,000 $ 563,000 210,000 30,000 400,000 175,000 334,000 (17,000) $1,695,000 $ 41,000 150,000 (50,000) 11,000 10,000 21,000 98,000 17,000 $298,000 $1,993,000 Statement of Income and Retained Earnings For the Year Ended December 31, 2016 Net sales Operating expenses: Cost of sales Selling and administrative expenses Depreciation $1,950,000 $1,150,000 505,000 53,000 $1,708,000 $ 242,000 Operating income Other (income) expense: Interest expense Equity in net income of Hall Inc. Loss on sale of equipment Amortization of patent $ 15,000 (13,000) 5,000 4,000 $ 11,000 231,000 Income before income taxes Income taxes: Current Deferred Provision for income taxes Net income Retained earnings, January 1, 2016 $ 79,000 11,000 90,000 $ 141,000 334,000 $ 475,000 43,000 $ 432,000 Cash dividends, paid August 13, 2016 Retained earnings, Docember 31, 2016 Additional information: On January 2, 2016, Farrell sold equipment costing $45,000, with a book value of $24,000, for $19,000 cash. b. On April 2, 2016, Farrell issued 1,000 shares of common stock for $23,000 cash. On May 14, 2016, Farrell sold all of its treasury stock for $25,000 cash. d. On June 1, 2016, Farrell paid S50,000 to retire bonds with a face value (and book value) of $50,000. e. On July 2, 2016, Farrell purchased equipment for $63,000 cash. f. On December 31, 2016, land with a fair market value of $150,000 was purchased through the issuance of a long term note in the amount of $150,000. The note bears interest at the rate of 15% and is due on December 31, 2018. g. Deferred taxes payable represent temporary differences relating to the use of accelerated depreciation methods for income tax reporting and the straight-line method for financial statement reporting. a. c. Required: 1. Prepare a spreadsheet to support a statement of cash flows for Farrell for the year ended December 31, 2016, based on the preceding information. 2. Prepare the statement of cash flows. Comprehensive The following are Farrell Corporation's balance sheets as of December 31, 2016, and 2015, and the statement of income and retained earnings for the year ended December 31, 2016: Balance Sheets December 31 Increase 2016 2015 (Decrease) Assets Cash $ 225,000 295,000 549,000 73,000 350,000 624,000 (139,000) 16,000 $1,993,000 $ 180,000 305,000 431,000 60,000 200,000 606,000 (107,000) 20,000 $1,695,000 $ 45,000 (10,000) 118,000 13,000 150,000 18,000 (32,000) (4,000) $298,000 Accounts receivable, net Inventories Investment in Hall Inc. at equity Land Plant and equipment Less: Accumulated depreciation Patent Total Assets Liabilities and Shareholders' Equity Accounts payable and accrued expenses Note payable, long-term Bonds payable Deferred taxes payable Common stock, $io par Additional paid-in capital Retained earnings Treasury stock, at cost Total Liabilities and Shareholders' Equity $ 604,000 150,000 160,000 41,000 410,000 196,000 432,000 $ 563,000 210,000 30,000 400,000 175,000 334,000 (17,000) $1,695,000 $ 41,000 150,000 (50,000) 11,000 10,000 21,000 98,000 17,000 $298,000 $1,993,000 Statement of Income and Retained Earnings For the Year Ended December 31, 2016 Net sales Operating expenses: Cost of sales Selling and administrative expenses Depreciation $1,950,000 $1,150,000 505,000 53,000 $1,708,000 $ 242,000 Operating income Other (income) expense: Interest expense Equity in net income of Hall Inc. Loss on sale of equipment Amortization of patent $ 15,000 (13,000) 5,000 4,000 $ 11,000 231,000 Income before income taxes Income taxes: Current Deferred Provision for income taxes Net income Retained earnings, January 1, 2016 $ 79,000 11,000 90,000 $ 141,000 334,000 $ 475,000 43,000 $ 432,000 Cash dividends, paid August 13, 2016 Retained earnings, Docember 31, 2016 Additional information: On January 2, 2016, Farrell sold equipment costing $45,000, with a book value of $24,000, for $19,000 cash. b. On April 2, 2016, Farrell issued 1,000 shares of common stock for $23,000 cash. On May 14, 2016, Farrell sold all of its treasury stock for $25,000 cash. d. On June 1, 2016, Farrell paid S50,000 to retire bonds with a face value (and book value) of $50,000. e. On July 2, 2016, Farrell purchased equipment for $63,000 cash. f. On December 31, 2016, land with a fair market value of $150,000 was purchased through the issuance of a long term note in the amount of $150,000. The note bears interest at the rate of 15% and is due on December 31, 2018. g. Deferred taxes payable represent temporary differences relating to the use of accelerated depreciation methods for income tax reporting and the straight-line method for financial statement reporting. a. c. Required: 1. Prepare a spreadsheet to support a statement of cash flows for Farrell for the year ended December 31, 2016, based on the preceding information. 2. Prepare the statement of cash flows. Comprehensive The following are Farrell Corporation's balance sheets as of December 31, 2016, and 2015, and the statement of income and retained earnings for the year ended December 31, 2016: Balance Sheets December 31 Increase 2016 2015 (Decrease) Assets Cash $ 225,000 295,000 549,000 73,000 350,000 624,000 (139,000) 16,000 $1,993,000 $ 180,000 305,000 431,000 60,000 200,000 606,000 (107,000) 20,000 $1,695,000 $ 45,000 (10,000) 118,000 13,000 150,000 18,000 (32,000) (4,000) $298,000 Accounts receivable, net Inventories Investment in Hall Inc. at equity Land Plant and equipment Less: Accumulated depreciation Patent Total Assets Liabilities and Shareholders' Equity Accounts payable and accrued expenses Note payable, long-term Bonds payable Deferred taxes payable Common stock, $io par Additional paid-in capital Retained earnings Treasury stock, at cost Total Liabilities and Shareholders' Equity $ 604,000 150,000 160,000 41,000 410,000 196,000 432,000 $ 563,000 210,000 30,000 400,000 175,000 334,000 (17,000) $1,695,000 $ 41,000 150,000 (50,000) 11,000 10,000 21,000 98,000 17,000 $298,000 $1,993,000 Statement of Income and Retained Earnings For the Year Ended December 31, 2016 Net sales Operating expenses: Cost of sales Selling and administrative expenses Depreciation $1,950,000 $1,150,000 505,000 53,000 $1,708,000 $ 242,000 Operating income Other (income) expense: Interest expense Equity in net income of Hall Inc. Loss on sale of equipment Amortization of patent $ 15,000 (13,000) 5,000 4,000 $ 11,000 231,000 Income before income taxes Income taxes: Current Deferred Provision for income taxes Net income Retained earnings, January 1, 2016 $ 79,000 11,000 90,000 $ 141,000 334,000 $ 475,000 43,000 $ 432,000 Cash dividends, paid August 13, 2016 Retained earnings, Docember 31, 2016 Additional information: On January 2, 2016, Farrell sold equipment costing $45,000, with a book value of $24,000, for $19,000 cash. b. On April 2, 2016, Farrell issued 1,000 shares of common stock for $23,000 cash. On May 14, 2016, Farrell sold all of its treasury stock for $25,000 cash. d. On June 1, 2016, Farrell paid S50,000 to retire bonds with a face value (and book value) of $50,000. e. On July 2, 2016, Farrell purchased equipment for $63,000 cash. f. On December 31, 2016, land with a fair market value of $150,000 was purchased through the issuance of a long term note in the amount of $150,000. The note bears interest at the rate of 15% and is due on December 31, 2018. g. Deferred taxes payable represent temporary differences relating to the use of accelerated depreciation methods for income tax reporting and the straight-line method for financial statement reporting. a. c. Required: 1. Prepare a spreadsheet to support a statement of cash flows for Farrell for the year ended December 31, 2016, based on the preceding information. 2. Prepare the statement of cash flows. Comprehensive The following are Farrell Corporation's balance sheets as of December 31, 2016, and 2015, and the statement of income and retained earnings for the year ended December 31, 2016: Balance Sheets December 31 Increase 2016 2015 (Decrease) Assets Cash $ 225,000 295,000 549,000 73,000 350,000 624,000 (139,000) 16,000 $1,993,000 $ 180,000 305,000 431,000 60,000 200,000 606,000 (107,000) 20,000 $1,695,000 $ 45,000 (10,000) 118,000 13,000 150,000 18,000 (32,000) (4,000) $298,000 Accounts receivable, net Inventories Investment in Hall Inc. at equity Land Plant and equipment Less: Accumulated depreciation Patent Total Assets Liabilities and Shareholders' Equity Accounts payable and accrued expenses Note payable, long-term Bonds payable Deferred taxes payable Common stock, $io par Additional paid-in capital Retained earnings Treasury stock, at cost Total Liabilities and Shareholders' Equity $ 604,000 150,000 160,000 41,000 410,000 196,000 432,000 $ 563,000 210,000 30,000 400,000 175,000 334,000 (17,000) $1,695,000 $ 41,000 150,000 (50,000) 11,000 10,000 21,000 98,000 17,000 $298,000 $1,993,000 Statement of Income and Retained Earnings For the Year Ended December 31, 2016 Net sales Operating expenses: Cost of sales Selling and administrative expenses Depreciation $1,950,000 $1,150,000 505,000 53,000 $1,708,000 $ 242,000 Operating income Other (income) expense: Interest expense Equity in net income of Hall Inc. Loss on sale of equipment Amortization of patent $ 15,000 (13,000) 5,000 4,000 $ 11,000 231,000 Income before income taxes Income taxes: Current Deferred Provision for income taxes Net income Retained earnings, January 1, 2016 $ 79,000 11,000 90,000 $ 141,000 334,000 $ 475,000 43,000 $ 432,000 Cash dividends, paid August 13, 2016 Retained earnings, Docember 31, 2016 Additional information: On January 2, 2016, Farrell sold equipment costing $45,000, with a book value of $24,000, for $19,000 cash. b. On April 2, 2016, Farrell issued 1,000 shares of common stock for $23,000 cash. On May 14, 2016, Farrell sold all of its treasury stock for $25,000 cash. d. On June 1, 2016, Farrell paid S50,000 to retire bonds with a face value (and book value) of $50,000. e. On July 2, 2016, Farrell purchased equipment for $63,000 cash. f. On December 31, 2016, land with a fair market value of $150,000 was purchased through the issuance of a long term note in the amount of $150,000. The note bears interest at the rate of 15% and is due on December 31, 2018. g. Deferred taxes payable represent temporary differences relating to the use of accelerated depreciation methods for income tax reporting and the straight-line method for financial statement reporting. a. c. Required: 1. Prepare a spreadsheet to support a statement of cash flows for Farrell for the year ended December 31, 2016, based on the preceding information. 2. Prepare the statement of cash flows.

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