Question

The income statement for CashCat Company for the year ending December 31, 2016 is shown in Exhibit 1 and balance sheets as of December 31, 2015 and 2016 are shown in Exhibit 2. The company’s accountant provided the additional information for transactions during 2016:

(1) Purchased property, plant and equipment (PP&E) at a cost of $400,000.

(2) Issued $98,000 of new bonds payable.

(3) Issued common stock for $25,000.

Required: Prepare a statement of cash flows, in good form, for 2016 using the indirect method.

		EXHIBIT 1
		CASHCAT COMPANY
		Income Statements
		For the Year Ending December 31, 2016
		Total revenue	$1,000,000
		Costs and expenses:
		Cost of sales	$425,000
		General and administrative expense	300,000
		Depreciation-PP&E	60,000
		Total costs and expenses	785,000
		Operating income	215,000
		Other items:
		Gain on retirement of bonds	25,000
		Loss on sale of PP&E	(10,000)
		Interest expense	(80,000)
		Income before income taxes	150,000
		Income taxes	50,000
		Net income	$100,000

		EXHIBIT 2
		CASHCAT COMPANY
		Balance Sheets
		For the Years Ending December 31, 2015 and 2016
		Current Assets:	2015	2016
		Cash and cash equivalents	$20,000	$16,000
		Accounts receivable	80,000	90,000
		Inventory	40,000	30,000
		Total current assets	$140,000	$136,000
		Property, Plant and Equipment:
		Property, plant and equipment at cost	$800,000	$900,000
		Accumulated depreciation	(325,000)	(350,000)
		Net property and equipment	475,000	550,000
		Total assets	$615,000	$686,000
		Current Liabilities:
		Accounts payable	$85,000	$100,000
		Income taxes payable	30,000	28,000
		Total current liabilities	$115,000	$128,000
		Long-Term Debt
		Bonds payable	$270,000	$268,000
		Stockholders' Equity:
		Common stock	$10,000	$15,000
		Capital in excess of par value	80,000	85,000
		Retained earnings	180,000	210,000
		Treasury stock	(40,000)	(20,000)
		Total stockholder's Equity	230,000	290,000
		Total liabilities and stockholders' equity	$615,000	$686,000
		check	0	0