# *Problem 23-2 The comparative balance sheets for Sarasota Corporation show the following information. December 31 2017...

###### Question:

*Problem 23-2

The comparative balance sheets for Sarasota Corporation show the following information.
 December 31 2017 2016 Cash $33,500$12,900 Accounts receivable 12,100 10,000 Inventory 11,900 8,900 Available-for-sale debt investments –0– 3,100 Buildings –0– 29,800 Equipment 44,900 19,900 Patents 4,900 6,200 $107,300$90,800 Allowance for doubtful accounts $3,000$4,600 Accumulated depreciation—equipment 2,000 4,600 Accumulated depreciation—building –0– 6,100 Accounts payable 4,900 3,100 Dividends payable –0– 5,000 Notes payable, short-term (nontrade) 3,000 3,900 Long-term notes payable 31,000 25,000 Common stock 43,000 33,000 Retained earnings 20,400 5,500 $107,300$90,800

Additional data related to 2017 are as follows.
 1 Equipment that had cost $11,200 and was 40% depreciated at time of disposal was sold for$2,500. 2 $10,000 of the long-term note payable was paid by issuing common stock. 3 Cash dividends paid were$5,000. 4 On January 1, 2017, the building was completely destroyed by a flood. Insurance proceeds on the building were $30,200 (net of$2,100 taxes). 5 Investments (available-for-sale) were sold at $1,700 above their cost. The company has made similar sales and investments in the past. 6 Cash was paid for the acquisition of equipment. 7 A long-term note for$16,000 was issued for the acquisition of equipment. 8 Interest of $2,100 and income taxes of$6,600 were paid in cash.

Prepare a statement of cash flows using the indirect method. Flood damage is unusual and infrequent in that part of the country. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)

SARASOTA CORPORATION Statement of Cash Flows For the Year Ended Dece Cash Flows from Operat Net Income Adjustments to reconcile net income to Gain from Flood Damag Depreciation Expense Patent Amortization Loss on Sale of Equipme Gain on Sale of Investm Increase in Accounts Re Increase in Inventory Increase in Accounts Pai
Supplemental disclosures of cash flow information: " जी

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