The following are Wildhorse Corp.’s comparative balance sheetaccounts at December 31, 2017 and 2016, with a column showing theincrease (decrease) from 2016 to 2017.
COMPARATIVE BALANCE SHEETS |
| | 2017 | | 2016 | | Increase
(Decrease) |
| Cash | | $811,100 | | | $702,700 | | | $108,400 | |
| Accounts receivable | | 1,139,100 | | | 1,176,000 | | | (36,900 | ) |
| Inventory | | 1,847,000 | | | 1,704,500 | | | 142,500 | |
| Property, plant, and equipment | | 3,317,700 | | | 2,945,400 | | | 372,300 | |
| Accumulated depreciation | | (1,158,000 | ) | | (1,048,400 | ) | | (109,600 | ) |
| Investment in Myers Co. | | 312,200 | | | 274,000 | | | 38,200 | |
| Loan receivable | | 250,000 | | | — | | | 250,000 | |
| Total assets | | $6,519,100 | | | $5,754,200 | | | $764,900 | |
| | | | | | | | | |
| Accounts payable | | $1,010,900 | | | $960,700 | | | $50,200 | |
| Income taxes payable | | 29,900 | | | 50,500 | | | (20,600 | ) |
| Dividends payable | | 80,600 | | | 100,700 | | | (20,100 | ) |
| Lease liabililty | | 432,100 | | | — | | | 432,100 | |
| Common stock, $1 par | | 500,000 | | | 500,000 | | | — | |
| Paid-in capital in excess of par—common stock | | 1,499,300 | | | 1,499,300 | | | — | |
| Retained earnings | | 2,966,300 | | | 2,643,000 | | | 323,300 | |
| Total liabilities and stockholders’equity | | $6,519,100 | | | $5,754,200 | | | $764,900 | |
Additional information:
| 1. | | On December 31, 2016, Wildhorse acquired 25% of Myers Co.’scommon stock for $274,000. On that date, the carrying value ofMyers’s assets and liabilities, which approximated their fairvalues, was $1,096,000. Myers reported income of $152,800 for theyear ended December 31, 2017. No dividend was paid on Myers’scommon stock during the year. |
| 2. | | During 2017, Wildhorse loaned $332,200 to TLC Co., an unrelatedcompany. TLC made the first semiannual principal repayment of$82,200, plus interest at 10%, on December 31, 2017. |
| 3. | | On January 2, 2017, Wildhorse sold equipment costing $59,800,with a carrying amount of $38,000, for $40,100 cash. |
| 4. | | On December 31, 2017, Wildhorse entered into a capital leasefor an office building. The present value of the annual rentalpayments is $432,100, which equals the fair value of the building.Wildhorse made the first rental payment of $60,300 when due onJanuary 2, 2018. |
| 5. | | Net income for 2017 was $403,900. |
| 6. | | Wildhorse declared and paid the following cash dividends for2017 and 2016. |
| | 2017 | | 2016 |
| Declared | | December 15, 2017 | | December 15, 2016 |
| Paid | | February 28, 2018 | | February 28, 2017 |
| Amount | | $80,600 | | $100,700 |
Prepare a statement of cash flows for Wildhorse Corp. for the yearended December 31, 2017, using the indirect method.(Show amounts that decrease cash flow with either a -sign e.g. -15,000 or in parenthesis e.g.(15,000).)
