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The changes in Tener Company’s balance sheet account balances for last year appear below:
| Increases
(Decreases) |
|
| Asset and Contra-Asset Accounts: | |
| Cash | $(23,000) |
| Accounts receivable | $(20,000) |
| Inventory | $0 |
| Prepaid expenses | $27,000 |
| Long-term investments | $57,000 |
| Property, plant and equipment | $32,000 |
| Accumulated depreciation | $72,000 |
| Liability and Equity Accounts: | |
| Accounts payable | $20,000 |
| Accrued liabilities | $(30,000) |
| Income taxes payable | $31,000 |
| Bonds payable | $(60,000) |
| Common stock | $28,000 |
| Retained earnings | $32,200 |
|
The company’s income statement for the year appears below:
|
| Income Statement | |
| Sales | $920,000 |
| Cost of goods sold |
535,000
|
| Gross margin | 385,000 |
| Selling and administrative expenses |
278,000
|
| Net operating income | 107,000 |
| Income taxes | 42,800 |
| Net income |
$64,200
|
|
The company declared and paid $32,000 in cash dividends during the year. It did not dispose of any property, plant, and equipment during the year. The company uses the direct method to determine the net cash provided by operating activities.
|
| On the statement of cash flows, the cost of goods sold adjusted to a cash basis would be: |
| $495,000 | |
| $515,000 | |
| $555,000 | |
$535,000
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