(Learning Objectives 3, 4, 5, 6: Preparing the statement of cash fl ows—indirect and direct methods) The comparative balance sheets of Ibrahim Design Studio, Inc., at June 30, 20X6 and 20X5, and transaction data for fi scal 20X6 are as follows:

Transaction data for the year ended June 30, 20X6:

a. Net income, $80,700

b. Depreciation expense on equipment, $13,900

c. Purchased long-term investment, $4,700

d. Sold land for $54,900, including $6,500 loss

e. Acquired equipment by issuing long-term note payable, $14,600

f. Paid long-term note payable, $61,400 g. Received cash for issuance of shares, $2,400 h. Paid cash dividends, $48,400 i. Paid short-term note payable by issuing shares, $5,000

❙ Requirements 1. Prepare the statement of cash fl ows of Ibrahim Design Studio, Inc., for the year ended June 30, 20X6, using the indirect method to report operating activities. Also prepare the accompanying schedule of non-cash investing and fi nancing activities. All current accounts except short-term notes payable result from operating transactions.

2. Prepare a supplementary schedule showing cash fl ows from operations by the direct method. The accounting records provide the following: collections from customers,

$241,700; interest received, $1,700; payments to suppliers, $118,600; payments to employees, $41,900; payments for income tax, $12,900; and payment of interest, $4,900.