Question: Data for Brecker Inc. are presented in
Data for Brecker Inc. are presented in E23-13.
Instructions
Prepare a statement of cash flows using the indirect method.
From E23-13:
Brecker Inc., a greeting card company, had the following statements prepared as of December 31, 2017.
Additional information:
1. Dividends in the amount of $6,000 were declared and paid during 2017.
2. Depreciation expense and amortization expense are included in operating expenses.
3. No unrealized gains or losses have occurred on the investments during the year.
4. Equipment that had a cost of $20,000 and was 70% depreciated was sold during 2017.
Transcribed Image Text:
BRECKER INC. COMPARATIVE BALANCE SHEET AS OF DECEMBER 31, 2017 AND 2016 12/31/17 12/31/16 $ 6,000 62,000 35,000 40,000 5,000 154,000 (35,000) 46,000 $ 7,000 51,000 18,000 60,000 4,000 130,000 (25,000) 50,000 Cash Accounts receivable Short-term debt investments (available-for-sale) Inventory Prepaid rent Equipment Accumulated depreciation-equipment Copyrights Total assets $313,000 $295,000 Accounts payable Income taxes payable Salaries and wages payable Short-term loans payable Long-term loans payable Common stock, $10 par Contributed capital, common stock Retained earnings $ 46,000 4,000 8,000 8,000 60,000 100,000 30,000 57,000 $ 40,000 6,000 4,000 10,000 69,000 100,000 30,000 36,000 Total liabilities and stockholders' equity $313,000 $295,000 BRECKER INC. INCOME STATEMENT FOR THE YEAR ENDING DECEMBER 31, 2017 Sales revenue $338,150 Cost of goods sold 175,000 Gross profit Operating expenses 163,150 120,000 Operating income Interest expense Gain on sale of equipment 43,150 $11,400 2,000 9,400 33,750 6,750 Income before tax Income tax expense Net income $ 27,000
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