Norrington Trading Co. provides the following income statement for 2013: Sales . . . . . .

Question:

Norrington Trading Co. provides the following income statement for 2013:
Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $675,400
Cost of goods sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 243,500
Gross margin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $431,900
Depreciation expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51,000
Salaries expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 124,600
Interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,300
Other expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 98,700
Income taxes expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44,000
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $102,300
In addition, the following information is available:
............................................................ Dec. 31, 2013 .................... Dec. 31, 2012
Accounts receivable . . . . . . . . . . . . . . . . . . . . . . . . . . $52,000 ............................. $47,000
Inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78,100 ................................ 72,300
Prepaid other expenses . . . . . . . . . . . . . . . . . . . . . . . . . 5,600 ................................... 6,700
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53,600 ................................. 52,300
Interest payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 800 ...................................... 1,200
Income taxes payable . . . . . . . . . . . . . . . . . . . . . . . . . 5,200 .................................... 3,400
Using the format presented in the chapter, prepare the Operating Activities section of the statement of cash flows and present that information using (a) the direct method and (b) the indirect method.
Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...