Lewis,IncUses the Indirect Method to Prepare Its Statement of Cash $\begin{array}{llr} \text {Lewis, Inc. } &\\ \text { Comparative Balance Sheet } &\\ \text {December 31,2017 and 2016 } &\end{array}$

question 145

Essay

Lewis,Inc.uses the indirect method to prepare its statement of cash flows.Refer to the following portion of the comparative balance sheet:
$\begin{array}{llr} \text {Lewis, Inc. } &\\ \text { Comparative Balance Sheet } &\\ \text {December 31,2017 and 2016 } &\end{array}$
$\begin{array}{llll}& 2017 & 2016 & \text { Increase/(Decrease) } \\ \text { Cash } & \$ 42,000 & \$ 36,000 & \$ 6,000 \\\text { Accounts Receivable } & 62,000 & 70,000 & (8,000) \\\text { Merchandise Inventory } & 106,000 & 50,000 & 56,000 \\\text { PP\&E, net } & \underline{240,000} & \underline{180,000} & \underline{60,000} \\\text { Total Assets } & \$ 450,000 & \$ 336,000 & \$ 114,000\end{array}$ Additional information provided by the company includes the following:
Equipment costing $104,000 was purchased for cash.
Equipment with a net book value of $20,000 was sold for $28,000.
Depreciation Expense of $24,000 was recorded during the year.
Use the T-account format and evaluate the transactions affecting Property,Plant,and Equipment,net.

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