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“Fred Slezak presented the following comparative balance sheet: ” FRED SLEZAK CORPORATION Comparative Balance Sheet December 31, 20X5 and 20X4

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Fred Slezak presented the following comparative balance sheet:

FRED SLEZAK CORPORATION
Comparative Balance Sheet
December 31, 20X5 and 20X4
       
  Assets   20X5   20X4  
  Current assets      
  Cash   $          664,000   $               9,000  
  Accounts receivable               375,000                345,000  
  Inventories               150,000                160,000  
  Prepaid expenses                 35,000                  25,000  
  Total current assets   $       1,224,000   $            539,000  
  Property, plant, & equipment      
  Land   $          300,000   $            400,000  
  Building               700,000                700,000  
  Equipment               530,000                450,000  
    $       1,530,000   $         1,550,000  
  Less: Accumulated depreciation              (300,000)              (270,000) 
  Total property, plant, & equipment   $       1,230,000   $         1,280,000  
  Total assets   $       2,454,000   $         1,819,000  
       
  Liabilities      
  Current liabilities      
  Accounts payable   $          112,000   $            119,000  
  Interest payable                  2,000                           –  
  Total current liabilities   $          114,000   $            119,000  
  Long-term liabilities      
  Long-term note payable                 80,000                           –  
  Total liabilities   $          194,000   $            119,000  
       
  Stockholders’ equity      
  Common stock ($1 par)   $          700,000   $            600,000  
  Paid-in capital in excess of par               800,000                400,000  
  Retained earnings               760,000                700,000  
  Total stockholders’ equity   $       2,260,000   $         1,700,000  
  Total liabilities and equity   $       2,454,000   $         1,819,000  
       
       
Additional information about transactions and events occurring in 20X5 follows:
Dividends of $55,000 were declared and paid.
Accounts payable and accounts receivable relate solely to purchases and sales of inventory.  Prepaid items related only to advertising expenses.
The decrease in land resulted from the sale of a parcel at a $45,000 loss.  No land was purchased during the year. Equipment was purchased during the year in exchange for a promissory note payable.  No equipment was sold.
The increase in paid-in capital resulted from issuing additional shares for cash.
The income statement for the year ending December 31, 20X5, included the following key amounts:
Sales  $       2,000,000   
Cost of goods sold           1,200,000   
Salaries expense              400,000   
Advertising expense              150,000   
Depreciation expense                30,000   
Utilities expense                15,000   
Interest expense                 5,000   
Loss on sale of land                45,000   
Income tax expense                40,000   
Net income              115,000   
     
Prepare Fred Slezak’s statement of cash flows for the year ending 20X5.  Use the indirect approach, and include required supplemental information about cash paid for interest and taxes.
 
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