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cheng inc comparative balance sheets december 31 621069

Condensed financial data of Cheng Inc. follow.

CHENG INC. Comparative Balance Sheets December 31

Assets

2014

2013

Cash

$ 80,800

$ 48,400

Accounts receivable

92,800

33,000

Inventory

117,500

102,850

Prepaid expenses

28,400

26,000

Investments

143,000

114,000

Equipment

270,000

242,500

Accumulated depreciation—equipment

(50,000)

(52,000)

Total

$682,500

$514,750

Liabilities and Stockholders” Equity

Accounts payable

$112,000

$ 67,300

Accrued expenses payable

16,500

17,000

Bonds payable

110,000

150,000

Common stock

220,000

175,000

Retained earnings

224,000

105,450

Total

$682,500

$514,750

CHENG INC. Income Statement For the Year Ended December 31, 2014

Sales revenue Less:

$392,780

Cost of goods sold

$135,460

Operating expenses, excluding depreciation

12,410

Depreciation expense

46,500

Income tax expense

27,280

Interest expense

4,730

Loss on disposal of plant assets

7,500

233,880

Net income

$158,900

Additional information:

  1. New equipment costing $85,000 was purchased for cash during the year.
  2. Old equipment having an original cost of $57,500 was sold for $1,500 cash.
  3. Bonds matured and were paid off at face value for cash.
  4. A cash dividend of $40,350 was declared and paid during the year.

Instructions

Prepare a statement of cash flows using the indirect method.

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