Skysong Inc., a greeting card company, had the following statements prepared as of December 31, 2017.
SKYSONG INC.
COMPARATIVE BALANCE SHEET
AS OF DECEMBER 31, 2017 AND 2016
12 /31/ 17 12 /31/ 16 Cash
Accounts receivable $6,100
62,200 $7,000
51,500 Short-term debt investments (available-for-sale) 34,900 17,900 Inventory 40,300 60,500 5,000 3,900 Prepaid rent
Equipment 153,200 131,200 Accumulated depreciation—equipment
Copyrights (35,000 )
46,200 (24,700 )
49,800 $312,900 Total assets
Accounts payable
Income taxes payable $297,100 $46,000
4,000 $40,000
6,000 Salaries and wages payable 7,900 4,000 Short-term loans payable 8,100 10,100 Long-term loans payable 59,800 69,200 Common stock, $10 par
Contributed capital, common stock
Retained earnings
Total liabilities & stockholders’ equity 100,000
30,000
57,100
$312,900 100,000
30,000
37,800
$297,100 SKYSONG INC.
INCOME STATEMENT
FOR THE YEAR ENDING DECEMBER 31, 2017
Sales revenue
Cost of goods sold $336,150
174,100 Gross profit
Operating expenses 162,050
120,800 Operating income
Interest expense
Gain on sale of equipment
Income before tax
Income tax expense
Net income
Additional information: 41,250
$11,400
1,900 9,500
31,750
6,350
$25,400 1. Dividends in the amount of $6,100 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 $20,200 and was 70% depreciated was sold during 2017. Prepare a statement of cash flows using the direct method. (Show amounts that decrease cash flow with either a - sign e.g. -15,000
or in parenthesis e.g. (15,000).)
Statement of Cash Flows $ $ $

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