Condensed financial data of Pharoah Company follow.
| Pharoah Company Comparative Balance Sheets December 31 |
||||||
|---|---|---|---|---|---|---|
| Assets | 2022 | 2021 | ||||
| Cash | $ 153,520 | $ 91,960 | ||||
| Accounts receivable | 166,820 | 72,200 | ||||
| Inventory | 213,750 | 195,415 | ||||
| Prepaid expenses | 53,960 | 49,400 | ||||
| Long-term investments | 262,200 | 207,100 | ||||
| Plant assets | 541,500 | 460,750 | ||||
| Accumulated depreciation | (95,000 | ) | (98,800 | ) | ||
| Total | $1,296,750 | $978,025 | ||||
| Liabilities and Stockholders’ Equity | ||||||
| Accounts payable | $ 193,800 | $ 127,870 | ||||
| Accrued expenses payable | 31,350 | 39,900 | ||||
| Bonds payable | 209,000 | 277,400 | ||||
| Common stock | 418,000 | 332,500 | ||||
| Retained earnings | 444,600 | 200,355 | ||||
| Total | $1,296,750 | $978,025 | ||||
| Pharoah Company Income Statement Data For the Year Ended December 31, 2022 |
||||
|---|---|---|---|---|
| Sales revenue | $738,074 | |||
| Less: | ||||
| Cost of goods sold | $257,374 | |||
| Operating expenses, excluding depreciation | 23,579 | |||
| Depreciation expense | 88,350 | |||
| Income tax expense | 51,832 | |||
| Interest expense | 8,987 | |||
| Loss on disposal of plant assets | 14,250 | 444,372 | ||
| Net income | $ 293,702 | |||
Additional information:
| 1. | New plant assets costing $190,000 were purchased for cash during the year. | |
| 2. | Old plant assets having an original cost of $109,250 and accumulated depreciation of $92,150 were sold for $2,850 cash. | |
| 3. | Bonds payable matured and were paid off at face value for cash. | |
| 4. | A cash dividend of $49,457 was declared and paid during the year. |
Further analysis reveals that accounts payable pertain to merchandise creditors.
Prepare a statement of cash flows for Pharoah Company using the direct method.
