The comparative balance sheets for Rothlisberger Company as of December 31 are presented below.
ROTHLISBERGER COMPANY
Comparative Balance Sheets
December 31
Assets 2017 2016
Cash $81,000 $45,000
Accounts receivable 41,000 62,000
Inventory 151,450 142,000
Prepaid expenses 15,280 21,000
Land 105,000 130,000
Buildings 200,000 200,000
Accumulated depreciation-buildings (60,000) (40,000)
Equipment 221,000 155,000
Accumulated depreciation-equipment (45,000) (35,000)
Total $ 709,730 $ 680,000
Liabilities and Stockholders' Equity
Accounts payable $47,730 $40,000
Bonds payable 260,000 300,000
Common stock, $1 par 200,000 160,000
Retained earnings 202,000 180,000
Total $ 709,730 $ 680,000
Additional information:
1. Operating expenses include depreciation expense of $42,000 and charges from prepaid expenses of $5,720.
2. Land was sold for cash at book value.
3. Cash dividends of $20,000 were paid.
4. Net income for 2017 was $42,000.
5. Equipment was purchased for $88,000 cash. In addition, equipment costing $22,000 with a book value of $10,000 was sold for $6,000 cash.
6. Bonds were converted at face value by issuing 40,000 shares of $1 par value common stock.
Required:
a. Prepare a statement of cash flows for the year ended December 31, 2017, using the indirect method.