172.Based on the following income statement and balance sheet for Bankowski Corporation, determine the cash flows from operating activities using the indirect method.
Bankowski CorporationIncome StatementFor Year Ended December 31, 2015
Sales $504,000
Cost of goods sold $327,600
Depreciation expense33,000
Other operating expenses 125,500(486,100)
Other gains (losses):
Gain on sale of equipment 5,200
Income before taxes $23,100
Income tax expense (4,800)
Net income $18,300
Bankowski CorporationBalance SheetsAt December 31
20152014
173.Rowan, Inc.’s, income statement is shown below. Based on this income statement and the other information provided, calculate the net cash provided by operations using the indirect method.
Rowan, Inc.Income StatementFor Year Ended December 31, 2015
Sales $248,000
Cost of goods sold 116,000
Gross profit $132,000
Operating expenses
Wages and salaries expense$44,000
Rent expense16,000
Depreciation expense30,000
Other operating expenses 18,000 108,000
Income from operations $24,000
Gain on sale of equipment 26,000
Income before income taxes $50,000
Income taxes expense 17,500
Net income $32,500
Additional information:
Increase in accounts receivable$4,000
Increase in accounts payable16,000
Increase in income taxes payable300
Decrease in prepaid expenses10,000
Decrease in merchandise inventory14,000
Decrease in long-term notes payable20,000
174.The following information is available for the Aarons Corporation:
Aarons CorporationBalance SheetsAt December 31
20152014
Assets:
Cash$24,640$23,040
Accounts receivable32,18029,400
Merchandise inventory73,12561,710
Long-term investments55,90056,400
Equipment175,500145,500
Accumulated depreciation (33,550) (31,200)
Total assets$327,795$284,850
Liabilities:
Accounts payable$65,000$40,380
Income taxes payable10,72510,200
Bonds payable 48,750 66,000
Total liabilities$124,475$116,580
Equity:
Common stock117,00096,000
Paid-in capital in excess of par13,0009,000
Retained earnings 73,320 63,270
Total equity$203,320$168,270
Total liabilities and equity$327,795$284,850
Aarons CorporationIncome StatementFor Year Ended December 31, 2013
Sales $240,000
Cost of goods sold$80,900
Depreciation expense29,400
Other operating expenses48,000
Interest expense 2,000(160,300)
Other gains (losses):
Loss on sale of equipment (8,400)
Income before taxes 71,300
Income taxes expense 27,650
Net income $43,650
Additional information: (1) There was no gain or loss on the sales of the long-term investments, nor on the bonds retired. (2) Old equipment with an original cost of $37,550 was sold for $2,100 cash. (3) New equipment was purchased for $67,550 cash. (4) Cash dividends of $33,600 were paid. (5) Additional shares of stock were issued for cash. Prepare a complete statement of cash flows for calendar-year 2015 using the indirect method.
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