The balance sheet accounts of Rockwall Corporation at the beginning and end of 2016 are:

You also have the following information:

1.     On November 1, 2016, 25,000 shares of $1 par stock were sold for $175,000.

2.     A patent was purchased for $31,000

3.     During the year, equipment that had a cost basis of $26,400 and on which there was accumulated depreciation of $5,800 was sold for $15,000. No other plant assets were sold during the year.

4.     The 10%, $300,000 40-year bonds were dated and issued on January 2, 2003. Interest was payable on June 30 and December 31. They were sold originally at 97. These bonds were retired at 101 plus accrued interest on May 31, 2016.

5.     The 6%, $400,000 20-year bonds were dated January 1, 2016, and were sold on May 31 at 102 plus accrued interest. Interest is payable semiannually on June 30 and December 31. Expense of issuance was $1,200.

6.     Rockwall Corporation acquired 60% control in Jones Company on January 2, 2016, for $146,000. The income statement of Jones Company for 2016 shows a net income of $90,000.

7.     Extraordinary repairs to buildings of $12,600 were charged to Accumulated Depreciation – Buildings.

8.     Interest paid in 2016 was $31,000 and income taxes paid were $38,000.

9.     Net income for the year totaled $76,538.

Instructions

a)     From the information given, help with a statement of cash flows using the indirect method. The company uses straight-line amortization for bond interest.

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