A comparative balance sheet for Alcorn Company containing data for the last two years is as follows:
Comparative Balance Sheet
Cash and cash equivalents $ 71,000 $ 50,000
Accounts receivable 590,000 610,000
Inventory 608,000 420,000
Prepaid expenses 10,000 5,000
Total current assets 1,279,000 1,085,000
Property, plant, and equipment 2,370,000 1,800,000
Less accumulated depreciation 615,000 560,000
Net property, plant, and equipment 1,755,000 1,240,000
Long-term investments 80,000 130,000
Loans to subsidiaries 120,000 70,000
$ 3,234,000 $ 2,525,000
Liabilities and Stockholders' Equity
Accounts payable $ 870,000 $ 570,000
Accrued liabilities 25,000 42,000
Income taxes payable 133,000 118,000
Total current liabilities 1,028,000 730,000
Bonds payable 620,000 400,000
Total liabilities 1,648,000 1,130,000
Common stock 1,090,000 1,000,000
Retained earnings 496,000 395,000
Total stockholders’ equity 1,586,000 1,395,000
Total liabilities and stockholders' equity $ 3,234,000 $ 2,525,000
The following additional information is available about the company’s activities during this year:
a. The company declared and paid a cash dividend this year.
b. Bonds with a principal balance of $380,000 were repaid during this year.
c. Equipment was sold during this year for $70,000. The equipment had cost $130,000 and had $40,000 in accumulated depreciation on the date of sale.
d. Long-term investments were sold during the year for $110,000. These investments had cost $50,000 when purchased several years ago.
e. The subsidiaries did not repay any outstanding loans during the year.
f. Alcorn did not repurchase any of its own stock during the year.
The company reported net income this year as follows:
Sales $ 3,000,000
Cost of goods sold 1,860,000
Gross margin 1,140,000
Selling and administrative expenses
Net operating income 210,000
Gain on sale of investments $ 60,000
Loss on sale of equipment 20,000 40,000
Income before taxes 250,000
Net income $ 170,000
Using the indirect method, prepare a statement of cash flows for this year. (Amounts to be deducted should be indicated with a minus sign. Omit the "$" sign in your response.)
Statement of Cash Flows
Adjustments to convert net income to cash basis:
Net cash operating activities
Net cash investing activities
Net cash financing activities
Cash balance, beginning
Cash balance, ending $
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