Statement of Cash Flows

Jacoby Corporation, a merchandiser, recently completed itscalendar year 2016 operations. For the year:

• ? All sales are credit sales

• ? All credits to Accounts Receivable reflect cash receipts fromcustomers

• ? All purchases of inventory are on credit

• ? All debits to Accounts Payable reflect cash payments forinventory

• ? Other expenses are paid in advance and are initially debitedto Prepaid Expenses.

• ? The company’s balance sheets and income statement follow.

  Jacoby Corporation Balance Sheet December 31, 2015 and 2016

ACG2071 - 2185

	2016	2015
Assets
Cash	$136,500	$71,550
Accounts receivable	74,100	90,750
Merchandise inventory	454,500	490,200
Prepaid expenses	17,100	19,200
Equipment	278,250	216,000
Accumulated depreciation	(108,750)	(93,000)
Total Assets	$851,700	$794,700
Liabilities
Accounts payable	$117,450	$123,450
Short-term notes payable	17,250	11,250
Long-term notes payable	112,500	82,500
Common stock, $5 par	465,000	450,000
Paid in capital in excess	18,000	0
Retained earnings	121,500	127,500
TOTAL Liabilities	$851,700	$794,700

Jacoby Corporation Income Statement December 31, 2016

Sales		$1,083,000
Cost of goods sold		585,000
Gross profit		498,000
Operating Expenses
Depreciation expense	$36,600
Other expenses	392,850
Total operating expenses		429,450
		68,550
Gain and losses
Loss on sale of equipment		2,100
Income before taxes		66,450
Income tax expense		9,450
Net income		$57,000

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Additional Information on Year 2011 Transactions

1. Thelossonthecashsaleofequipmentwas$2,100(detailsinb).

2. Sold equipment costing $51,000, with accumulated depreciation of$20,850, for $28,050 cash.

3. Purchased equipment costing $113,250 by paying $38,250 cash andsigning a long-term note

   payable for the balance

4. Borrowed $6,000 cash by signing a short-term note payable.

5. Paid$45,000cashtoreducethelong-termnotespayable.

6. Issued 3,000 shares of common stock for $11 cash per share.

7. Declaredandpaidcashdividendsof$63,000.