Refer to the information reported about Gazelle Corporation in Problem 12-3B.
In Problem 12-3B
Gazelle Corporation, a merchandiser, recently completed its calendar-year 2015 operations. For the year,
(1) All sales are credit sales,
(2) All credits to Accounts Receivable reflect cash receipts from customers,
(3) All purchases of inventory are on credit,
(4) All debits to Accounts Payable reflect cash payments for inventory, and
(5) Other Expenses are paid in advance and are initially debited to Prepaid Expenses. The company's balance sheets and income statement follow.

Additional Information on Year 2015 Transactions
a. The loss on the cash sale of equipment was $2,100 (details in b).
b. Sold equipment costing $51,000, with accumulated depreciation of $22,850, for $26,050 cash.
c. Purchased equipment costing $113,250 by paying $43,250 cash and signing a long-term note payable for the balance.
d. Borrowed $5,000 cash by signing a short-term note payable.
e. Paid $47,500 cash to reduce the long-term notes payable.
f. Issued 3,000 shares of common stock for $15 cash per share.
g. Declared and paid cash dividends of $53,600.
Required
Prepare a complete statement of cash flows using a spreadsheet as in Exhibit 12A.1; report its operating activities using the indirect method. Identify the debits and credits in the Analysis of Changes columns with letters that correspond to the following list of transactions and events.
a. Net income was $158,100.
b. Accounts receivable decreased.
c. Inventory decreased.
d. Prepaid expenses decreased.
e. Accounts payable decreased.
f. Depreciation expense was $38,600.
g. Sold equipment costing $51,000, with accumulated depreciation of $22,850, for $26,050 cash. This yielded a loss of $2,100.
h. Purchased equipment costing $113,250 by paying $43,250 cash and
i. By signing a long-term note payable for the balance.
j. Borrowed $5,000 cash by signing a short-term note payable.
k. Paid $47,500 cash to reduce the long-term notes payable.
l. Issued 3,000 shares of common stock for $15 cash per share.
m. Declared and paid cash dividends of $53,600.

Transcribed Image Text:

GAZELLE CORPORATION Comparative Balance Sheets December 31,2015 and 2014 2015 2014 $123.450 77.100 61,550 Accounts receivable 240.600 250,700 17.000 456,250 410,000 262.250 200.000 (10,750) 95,000) $607,750 $515,000 15.100 Total current assets Equipment Accum. depreciation Equipment Liabilities and Equity Accounts payable Short-term notes payable Total current liabilities Long-term notes payable Total liabilities $7,750 $102,000 0,000 32.750 2,000 100,00077.500 32,750 89,500 15,000 Common stock, $5 par Paid-in capital in excess 215,000 200,000 of par, common stock Retained earnings Total liabilities and equity 30,000 230,000 25.500 $607.750 $515,000 GAZELLE CORPORATION Income Statement For Year Ended December 31,2015 Cost of goods sold Gross proft $1.185,000 595,000 590,000 $ 38,600 362,850 Depreciation expense Total operating expenses gains (losses) Other expenses 401,450 88,550 (2,100) 186,450 Loss on sale of equipment Income before taxes Income taxes expense Net income $ 158,100