The Following Information Is Available for the Ehrens Corporation

question 88

Essay

The following information is available for the Ehrens Corporation:
$\begin{array}{c}\text {EHRENS CORPORATION}\\\text {Balance Sheets}\\\text {At December 31}\\\begin{array}{|l|r|r|}\hline&2013&2012\\\hline \text { Assets: } & & \\\hline \text { Cash } & \$ 24,640 & \$ 23,040 \\\hline \text { Accounts receivable } & 32,180 & 29,400 \\\hline \text { Merchandise inventory } & 73,125 & 61,710 \\\hline \text { Long-term investments } & 55,900 & 56,400 \\\hline \text { Equipment } & 175,500 & 145,500 \\\hline \text { Accumulated depreciation } & (33,550) & (31,200) \\\hline \text { Total assets } & \$ 327,795 & \$ 284,850 \\\hline\\\hline \text { Liabilities: } & & \\\hline \text { Accounts payable } & \$ 65,000 & \$ 40,380 \\\hline \text { Incomes taxes payable } & 10,725 & 10,200 \\\hline \text { Bonds payable } & 48,750 & \underline{66,000} \\\hline \text { Total liabilities } & \$ 124,475 & \$ 116,580 \\\hline \text { Equity: } & & \\\hline \text { Common stock } & 117,000 & 96,000 \\\hline \text { Contributed capital in excess of pay } & 13,000 & 9,000 \\\hline \text { Retained earnings } & 73,320 & \underline{63,270} \\\hline \text { Total equity } & \$ 203,320 & \$ 168,270 \\\hline \text { Total liabilities and equity } & \$ 327,795 & \$ 284.850 \\\hline \end{array}\end{array}$

$\begin{array}{c}\text {EHRENS CORPORATION }\\\text {Income Statement}\\\text {For Year Ended December 31, 2013}\\\begin{array}{|l|r|r|}\hline \text { Sales } & & \$ 240,000 \\\hline \text { Cost of goods sold } & \$ 80,900 & \\\hline \text { Depreciation expense } & 29,400 & \\\hline \text { Other operating expenses } & 48,000 & \\\hline \text { Interest expense } & 2,000 & (160,300) \\\hline \text { Other gains (losses): } & & \\\hline \text { Loss on sale of equipment } & & (8,400) \\\hline \text { Income before taxes } & & 71,300\\\hline \text { Income taxes expense } & & 27,650 \\\hline \text { Net income } & & \$ 43,650 \\\hline \end{array}\end{array}$

Additional information:
(1)There was no gain or loss on the sales of the long-term investments,nor on the bonds retired.
(2)Old equipment with an original cost of $37,550 was sold for $2,100 cash.
(3)New equipment was purchased for $67,550 cash.
(4)Cash dividends of $33,600 were paid.
(5)Additional shares of stock were issued for cash.
Prepare a statement of cash flows for the 2013 calendar year using the indirect method.

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Definitions:

Childhood Obesity

A medical condition wherein a child is significantly overweight for his or her age and height, leading to potential health risks and complications.

Rapid

Moving or happening quickly or in a short time span; characterized by speed.

Weight Gain

An increase in body weight, which can result from muscle mass increment, fat deposits, fluid retention, or other factors.

Growth Norms

Established standards or averages of physical and/or psychological development at various ages.