Refer to the information for Lamberson Company in P21-6
In exercise
The following information was taken from Lamberson Company€™s accounting records:

Additional information for the year:
a.

b. Dividends declared and paid totaled $700.
c. On January 1,2016, convertible preferred stock that had originally been issued at par value were converted into 500 shares of common stock. The book value method was used to account for the conversion.
d. Long term nonmarketable investments that cost $1,600 were sold for $2,300.
f. The long-term note payable was paid by issuing 250 shares of common stock at the beginning of the year. Equipment with a cost of $2,000 and a book value of $300 was sold for $100. The company uses one Accumulated Depreciation account for all depreciable assets.
g. Equipment was purchased at a cost of $16,200.
h. The 12% bonds payable were issued on August 31,2016, at 97. They mature on August 31, 2026. The company uses the straight line method to amortize the discount.
i. Taxable income was less than pretax accounting income, resulting in a $396 increase in deferred taxes payable.
j. Short-term marketable securities were purchased at a cost of $1,300. The portfolio was increased by $300 to a $3,800 fair value at year-end by adjusting the related allowance account
Required:
1. Using the direct method, prepare the operating activities section of the 2016 statement of cash flows for Lamberson.
2. (Optional). If you completed P21 6 earlier, prepare the remaining portion of the statement of cash flows. (A separate schedule reconciling net income to cash provided by operating activities is not necessary.)

Transcribed Image Text:

Account Balances Debits Marketable Securities (at cost) Allowunce fot Change in Vulue Discount on Bonds Payable $69,800 $85.400 Credits $ 16,400 Accumulated Depreciation Accounts Payable Income Taxes Payable 2 12% Bonds Payable Defrred Taxes Payable Converfible Preferred Stock, $100 par 2 Additional Paid-in Capital Unrealized Increose in Value of Marketable Securities $85,400 39930 Sales Cost of goods sdld Deprecialion expense Wages expense Other operoting expenses Bond interest expense Dividend revenue Gain on sale of inveslmen Loss on sale of equipmert Income lax expense Net income 19,890 2,100 (1,000 (410 820 700 200 05