Bridgeport Company, a major retailer of bicycles andaccessories, operates several stores and is a publicly tradedcompany. The comparative balance sheet and income statement forBridgeport as of May 31, 2017, are as follows. The company ispreparing its statement of cash flows.
BRIDGEPORT COMPANY
COMPARATIVE BALANCE SHEET
AS OF MAY 31 |
| | 2017 | | 2016 |
| Current assets | | | | |
| Cash | | $28,200 | | $19,800 |
| Accounts receivable | | 74,500 | | 58,200 |
| Inventory | | 221,300 | | 251,900 |
| Prepaid expenses | | 9,100 | | 7,100 |
| Total current assets | | 333,100 | | 337,000 |
| | | | |
| Plant assets | | | | |
| Plant assets | | 594,300 | | 499,200 |
| Less: Accumulated depreciation—plantassets | | 151,500 | | 124,500 |
| Net plant assets | | 442,800 | | 374,700 |
| Total assets | | $775,900 | | $711,700 |
| | | | |
| Current liabilities | | | | |
| Accounts payable | | $122,300 | | $116,200 |
| Salaries and wages payable | | 47,400 | | 72,500 |
| Interest payable | | 27,200 | | 24,900 |
| Total current liabilities | | 196,900 | | 213,600 |
| | | | |
| Long-term debt | | | | |
| Bonds payable | | 70,000 | | 100,000 |
| Total liabilities | | 266,900 | | 313,600 |
| | | | |
| Stockholders’ equity | | | | |
| Common stock, $10 par | | 370,000 | | 280,000 |
| Retained earnings | | 139,000 | | 118,100 |
| Total stockholders’ equity | | 509,000 | | 398,100 |
| Total liabilities and stockholders’ equity | | $775,900 | | $711,700 |
BRIDGEPORT COMPANY
INCOME STATEMENT
FOR THE YEAR ENDED MAY 31, 2017 |
| Sales revenue | | $1,264,700 |
| Cost of goods sold | | 726,300 |
| Gross profit | | 538,400 |
| | |
| Expenses | | |
| Salaries and wages expense | | 252,400 |
| Interest expense | | 74,500 |
| Depreciation expense | | 27,000 |
| Other expenses | | 8,100 |
| Total expenses | | 362,000 |
| Operating income | | 176,400 |
| Income tax expense | | 43,200 |
| Net income | | $133,200 |
The following is additional information concerning Bridgeport’stransactions during the year ended May 31, 2017.
| 1. | | All sales during the year were made on account. |
| 2. | | All merchandise was purchased on account, comprising the totalaccounts payable account. |
| 3. | | Plant assets costing $95,100 were purchased by paying $25,100in cash and issuing 7,000 shares of stock. |
| 4. | | The “other expenses” are related to prepaid items. |
| 5. | | All income taxes incurred during the year were paid during theyear. |
| 6. | | In order to supplement its cash, Bridgeport issued 2,000 sharesof common stock at par value. |
| 7. | | Cash dividends of $112,300 were declared and paid at the end ofthe fiscal year. |
Using the indirect method, calculate only the net cash flow fromoperating activities for Bridgeport Company for the year ended May31, 2017. (Show amounts that decrease cash flow witheither a - sign e.g. -15,000 or in parenthesis e.g.(15,000).)
