Reference no: EM131576819
Problem - The comparative balance sheets for Shamrock Corporation show the following information.
|
December 31
|
|
2017
|
2016
|
|
Cash
|
$33,300
|
$12,900
|
|
Accounts receivable
|
12,200
|
10,000
|
|
Inventory
|
11,900
|
9,000
|
|
Available-for-sale debt investments
|
-0-
|
2,900
|
|
Buildings
|
-0-
|
29,800
|
|
Equipment
|
44,900
|
20,100
|
|
Patents
|
5,000
|
6,300
|
|
$107,300
|
$91,000
|
|
|
|
|
Allowance for doubtful accounts
|
$3,000
|
$4,500
|
|
Accumulated depreciation-equipment
|
2,000
|
4,400
|
|
Accumulated depreciation-building
|
-0-
|
6,000
|
|
Accounts payable
|
5,000
|
2,900
|
|
Dividends payable
|
-0-
|
4,900
|
|
Notes payable, short-term (nontrade)
|
3,000
|
4,000
|
|
Long-term notes payable
|
31,000
|
25,000
|
|
Common stock
|
43,000
|
33,000
|
|
Retained earnings
|
20,300
|
6,300
|
|
$107,300
|
$91,000
|
Additional data related to 2017 are as follows.
1. Equipment that had cost $10,900 and was 40% depreciated at time of disposal was sold for $2,600.
2. $10,000 of the long-term note payable was paid by issuing common stock.
3. Cash dividends paid were $4,900.
4. On January 1, 2017, the building was completely destroyed by a flood. Insurance proceeds on the building were $29,900 (net of $2,100 taxes).
5. Investments (available-for-sale) were sold at $1,700 above their cost. The company has made similar sales and investments in the past.
6. Cash was paid for the acquisition of equipment.
7. A long-term note for $16,000 was issued for the acquisition of equipment.
8. Interest of $2,100 and income taxes of $6,500 were paid in cash.
Prepare a statement of cash flows using the indirect method. Flood damage is unusual and infrequent in that part of the country.