Preparing a Statement of Cash Flows Snow Corporation produces clock radios. Comparative income statements and balance sheets for the years ended December 31, 2009 and 2008, are presented.

The following additional information is available.

a. Dividends declared during 2009 were $6,000.

b. The market price per share of stock on December 31, 2009, was $14.50.

c. Equipment worth $16,000 was acquired by the issuance of a long-term note ($10,000)
and by paying cash ($6,000).

d. Land was acquired for $3,000 cash.

e. Depreciation of $11,000 was included in operating expenses for 2009.

f. There were no accruals or prepaid amounts for interest.
Required:
Analyze the data provided to prepare a statement of cash flows. Use (1) the indirect method and (2) the direct method to report cash flows from operating activities.

Transcribed Image Text:

Net sales revenue Cost of goods sold Gross margin Operating expenses Operating income Interest expense Income before taxes Income taxes Net income Snow Corporation Comparative Income Statements For the Years Ended December 31, 2009 and 2008 2009 2008 $600,000 $575,000 500,000 460,000 $100,000 $115,000 60,000 66,000 $ 34,000 4,000 $ 30,000 12,000 $ 18,000 $ 55,000 3,000 $ 52,000 21,000 $ 31,000