Catalina Inc. Refer to the attached financial statement information for Catalina Inc. for fiscal year ended 12/31/2003. Assume the following:

Notes payable are not related to amounts owed to regular suppliers due to regular operations.

Changes in Property, Plant and Equipment accounts did involve cash.

The only changes in accumulated Depreciation were due to Deprecation Expense.

Changes in Stockholders Equity accounts involved cash.

The dividends were cash dividends declared and paid during the year.

Requirements

1. Prepare a schedule for the calculation of cash generated from operating activities under the direct method.

2. Prepare a complete statement of cash flows by the direct method.

3. Prepare the Operating Activities section of the statement of the Statement of Cash flows by the indirect method.

 

Catalina Inc.
Comparative Balance Sheet
Assets	2003	2002
Current assets:
cash	$201,197	$212,000
Government notes (cash equivalent)	$5,700	$20,000
interest Receivable	$285	$700
Accounts Receivable	$535,800	$506,000
Merchandise Inventory	$613,394	$675,120
Supplies and Prepayments	$38,143	$27,356
Total current Assets	$1,394,519	$1,441,176
Property Plant and Equipment
Store Equipment	$456,000	$388,000
Less Accum. Depr.-Delivery Equipment	($171,000)	($140,000)
Delivery Equipment	$427,500	$320,000
Less Accum. Depr.-Delivery Equipment	($118,750)	($80,000)
Office Equipment	$361,000	$339,900
Less Accum. Depr.- Office Equipment	($76,000)	($61,000)
Total Property, Plant and Equipment	$878,750	$766,900
Total Assets	$2,273,269	$2,208,076
Liabilities
Current Liabilities
Notes Payable	$73,241	$118,000
Accounts Payable	$230,153	$384,470
Payroll Taxes Payable	$9,300	$15,200
Interest Payable	$899	$800
Total Liabilities	$313,593	$518,470
Stockholders Equity
Common Stock	$990,000	$980,000
Paid in Capital in excess of par common stock	$390,500	$390,000
Retained Earnings	$579,176	$319,606
Total Stockholders Equity	$1,959,676	$1,689,606
Total Liabilities and Stockholders Equity	$2,273,269	$2,208,076
Catalina Inc.
Income Statement
For the year Ended December 31 2003
Net sales		$2,687,750
Cost of Goods Sold		($1,264,673)
Gross Profit		$1,423,077
Operating Expenses		($1,035,528)
Operating Income		$387,549
Other Revenues and Expenses
Interest Revenue	$1,008
Interest Expense	($4,187)	($3,179)
Net Income		$384,370
Statement of Retained Earnings
For the year ended December 31 2003
Retained Earnings, January 1		$319,606
Net Income	$384,370
Less Dividends	($124,800)
Net Increase in Retained Earnings		$259,570
Retained Earnings December 31		$579,176