The comparative balance sheets of American-Davis Design Studio, Inc., at June 30, 2021 and 2020, and transaction data for fiscal 2021 are as follows:

Transaction data for the year ended June 30, 2021, follows: a. Net income, $60,500

b. Depreciation expense on equipment, $13,000

c. Purchased a long-term investment with cash, $15,800

d. Sold land for $39,900, including a $7,100 loss

e. Acquired equipment by issuing a long-term note payable, $14,900 

f. Paid off a long-term note payable, $60,800 

g. Received cash for the issuance of common stock, $8,300 

h. Paid cash dividends, $7,700 

i. Paid off a short-term note payable by issuing common stock, $4,900

Requirements 

1. Prepare the statement of cash flows of American-Davis Design Studio for the year ended June 30, 2021, using the indirect method to report operating activities. Also prepare the accompanying schedule of noncash investing and financing activities. All current account changes except for the short-term Notes Payable changes result from operating transactions.

2. Prepare a supplementary schedule showing cash flows from operations using the direct method. The accounting records provide the following: collections from customers, $254,300; interest received, $2,000; payments to suppliers, $147,200; payments to employees, $49,200; payments for income tax, $13,500; and payment of interest, $5,600.  

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12345 A1 American-Davis Design Studio, Inc. Comparative Balance Sheets 4 Current assets: Cash 5 6 7 8 9 Land 10 Equipment, net 11 Long-term investment 12 13 Current liabilities: Accounts receivable Inventories Prepaid expenses Notes payable, short-term Accounts payable 14 15 16 17 18 Interest payable 19 Salary payable 20 Long-term note payable 21 Common stock 22 Retained earnings 23 24 Income tax payable Accrued liabilities 2021 June 30, $ 23,700 $ 48,400 98,300 1,900 42,900 74,800 22,000 $ 312,000 $ $ 13,600 $ 29,600 13,000 55,700 3,500 4,500 52,100 2020 Increase (Decrease) 19,000 $ 22,800 50,200 3,000 89,900 72,900 6,200 264,000 $ 18,500 $ 40,800 15,300 4,700 25,600 48,100 (1,100) (47,000) 1,900 15,800 48,000 (4,900) (11,200) (2,300) 46,400 9,300 2,900 5,200 98,000 65,800 52,600 74,200 21,400 52,800 $ 312,000 $ 264,000 $ 48,000 600 (700) (45,900) 13,200