P17-7A To prepare the statement of cash flows, accountants for Shell City Oil Corp. have summarized 20X2 activity in two accounts as follows: CASH Beg. bal. 87,100 Payments of operating expenses 67,800 Issuance of common stock 34,600 Payment of long-term debt. 78,900 Receipts of dividends 14.100 Payment of income tax 12,600 Sale of investments 9,900 Payments on accounts payable 101,600 Collections from customers 315,100 Payment of dividends 1,800 Payment of salaries 67,500 Purchase of equipment 79,900 End. bal. 50,700 COMMON STOCK Beg. bal. 103,500 Issuance for cash 34,600 Issuance to acquire land 62,100 End. bal. 200,200 Required 1. Prepare Shell City's statement of cash flows for the year ended December 31, 20X2. using the direct method to report operating activities. Also prepare the accompanying schedule of noncash investing and financing activities. Shell City's 20X2 income statement and selected balance sheet data follow. 2. Use these data to prepare a supplementary schedule showing cash flows from operating activities by the indirect method. All activity in the current accounts results from opera- tions. SHELL CITY OIL CORP. Income Statement Year Ended December 31, 20X2 Revenues and gains: Sales revenue.. $281,800 Dividend revenue. 14,100 Total revenues and gains.. 295,900 Expenses: Cost of goods sold. $103,600 Salary expense. 66.800 Depreciation expense. 10,900 Other operating expense 64,500 Income tax expense.... 12.600 Total expenses.... 258,400 Net income. $ 37,500 SHELL CITY OIL CORP. Current assets: Balance Sheet Data Cash and cash equivalents. Accounts receivable.. Inventories... 20X2 Increase (Decrease) (33,300) 5,700 Investments. Equipment, net.. Land Current liabilities: Accounts payable. Salary payable... Other accrued liabilities. Long-term debt.. Common stock Retained earnings. (9.900) 69,000 62,100 $ 7,700 (700) (3,300) (78,900) 96,700 35,700