Reference no: EM132325765
Question
Problem 23-1
The following are Nash Corp.'s comparative balance sheet accounts at December 31, 2017 and 2016, with a column showing the increase (decrease) from 2016 to 2017.
COMPARATIVE BALANCE SHEETS
2017
2016
Increase
(Decrease)
Cash$822,700
$706,000
$116,700
Accounts receivable1,130,000
1,174,600
(44,600
)Inventory1,857,900
1,710,100
147,800
Property, plant, and equipment3,314,200
2,974,500
339,700
Accumulated depreciation(1,173,300
)(1,036,900
)(136,400
)Investment in Myers Co.307,900
276,600
31,300
Loan receivable251,300
-
251,300
Total assets$6,510,700
$5,804,900
$705,800
Accounts payable$1,018,900
$952,200
$66,700
Income taxes payable29,700
49,600
(19,900
)Dividends payable80,200
100,500
(20,300
)Lease liabililty400,300
-
400,300
Common stock, $1 par500,000
500,000
-
Paid-in capital in excess of par-common stock1,505,000
1,505,000
-
Retained earnings2,976,600
2,697,600
279,000
Total liabilities and stockholders' equity$6,510,700
$5,804,900
$705,800
Additional information:
1.On December 31, 2016, Nash acquired 25% of Myers Co.'s common stock for $276,600. On that date, the carrying value of Myers's assets and liabilities, which approximated their fair values, was $1,106,400. Myers reported income of $125,200 for the year ended December 31, 2017. No dividend was paid on Myers's common stock during the year.
2.During 2017, Nash loaned $299,500 to TLC Co., an unrelated company. TLC made the first semiannual principal repayment of $48,200, plus interest at 10%, on December 31, 2017.
3.On January 2, 2017, Nash sold equipment costing $60,600, with a carrying amount of $38,100, for $40,200 cash.
4.On December 31, 2017, Nash entered into a capital lease for an office building. The present value of the annual rental payments is $400,300, which equals the fair value of the building. Nash made the first rental payment of $59,900 when due on January 2, 2018.
5.Net income for 2017 was $359,200.
6.Nash declared and paid the following cash dividends for 2017 and 2016.
2017 2016
DeclaredDecember 15, 2017December 15, 2016PaidFebruary 28, 2018February 28, 2017Amount$80,200$100,500
Prepare statement of cash flows for Nash Corp. for the year ended December 31, 2017, using the indirect method. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)