The Comparative Balance Sheets for Gillen Inc Additional Information:
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question 138

Essay

The comparative balance sheets for Gillen Inc. appear below: $\begin{array}{|l|r|r|}\hline& \operatorname{Dec} 31,20X 7 & \text { Dec. } 31,20X 6\\\hline\text { Assets }\\\hline \text { Cash } & \$ 29,000 & \$ 10,000 \\\hline \text { Trade receivables } & 23,000 & 14,000 \\\hline \text { Prepaid expenses } & 6,000 & 9,000 \\\hline \text { Inventory } & 25,000 & 15,000 \\\hline \text { Long-term investments } & 0 & 23,000 \\\hline \text { Equipment } & 57,000 & 30,000 \\\hline \text { Accumulated depreciation-equipment } & \$ 18,000 & \underline{(14,000)} \\\hline \text { Total assets } &\$122,000 & \$ 87,000 \\\hline \text { Liabilities and Shareholders' Equity } & & \\\hline \text { Trade payables } & 21,000 & \$ 9,000 \\\hline \text { Mortgage notes payable } & 37,000 & 45,000 \\\hline \text { Common shares } &40,000 & 23,000 \\\hline \text { Retained earnings } & \underline{24,000} & 10,000 \\\hline \text { Total liabilities and shareholders' equity } &\$122,000& \$ 87,000 \\\hline\end{array}$ Additional information:
1. Net earnings for the year ending December 31, 20X7 were $27,000.
2. Cash dividends of $13,000 were declared and paid during the year ended December 31 20X7 .
3. Long-term investments that had a carrying amount of $23,000 were sold for $18,000 in 20X7. Prepare a cash flow statement for the year ended December 31, 20X7, using the indirect method.

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Definitions:

Personal Income Taxes

Taxes levied on individuals or households based on their income level, contributing to government revenue and affecting disposable income.

Corporate Income Taxes

Taxes imposed by governments on the income earned by businesses and corporations.

Sales and Excise Taxes

Taxes imposed on the sale of goods and services (sales tax) and on specific goods like gasoline and alcohol (excise tax), respectively.

Afferent Fibers

Nerve fibers that carry sensory information from the body's periphery towards the central nervous system.