Chapter 16, Problem E16.23E

E16-23 Computing the cash effect
Learning Objective 2

1. Payment: $8,000 4. Dividends $47,000
Rouse Exercise Equipment, Inc. reported the following financial statements for 2018:

ROUSE EXERCISE EQUIPMENT, INC. Income Statement Year Ended December 31, 2018
Net Sales Revenue	$ 713,000
Cost of Goods Sold	342,000
Gross Profit	371,000
Operating Expenses:Depreciation Expense$ 54,000Other Operating Expenses210,000
Total Operating Expenses	264,000
Net Income	$ 107,000

ROUSE EXERCISE EQUIPMENT. INC.Comparative Balance SheetDecember 31. 2018 and 2017

	2018	2017
Assets
Current Assets:
Cash	$ 17,000	$ 16,000
Accounts Receivable	57,000	46,000
Merchandise Inventory	79,000	90,000
Long-term Assets:
Plants Assets	260,500	216,400
Accumulated Depreciation—Plant Assets	(38,500)	(32,400)
Investments	96,000	73,000
Total Assets	$ 471,000	$ 409,000
Liabilities
Current Liabilities:
Accounts Payable	$ 72.000	$ 71,000
Salaries Payable	3,000	5,000
Long-term Liabilities:
Notes Payable	61,000	69,000
Total Liabilities	136,000	145,000
Stockholders' Equity
Common Stock, no par	45,000	34,000
Retained Earnings	290,000	230,000
Total Stockholders' Equity	335,000	264,000
Total Liabilities and Stockholders’ Equity	$471,000	$ 409,000

Requirements

1. Compute the amount of Rouse Exercise's acquisition of plant assets. Assume the acquisition was for cash. Rouse Exercise disposed of plant assets at book value. The cost and accumulated depreciation of the disposed asset was $47,900. No cash was received upon disposal.
2. Compute new borrowing or payment of long-term notes payable, with Rouse Exercise having only one long-term notes payable transaction during the year.
3. Compute the issuance of common stock with Rouse Exercise having only one common stock transaction during the year.
4. Compute the payment of cash dividends.

Note: Exercise E16-23 must be completed before attempting Exercise E16-24.