1.Dawls Corporation reported stockholders' equity on December 31 of the prior year as follows:

Common stock, $5 par value, 1,000,000 shares authorized, 500,000 shares issued: $2,500,000

Contributed capital in excess of par, common stock : 1,000,000

Retained earnings :3,000,000

The following selected transactions occurred during the current year:

Feb 15: The board of directors declared a 5% stock dividend to stockholders of record on March 1, payable March 20. The stock was selling for $8 per share.

Mar. 9: Paid the stock dividend

May 1: A cash dividend of $.30 per share was declared by the board of directors to stockholders of record on May 20, payable June 1.

June 1: Paid the cash dividend.

Aug 20: The board decided to split the stock 4-for-1, effective on September 1.

Sept 1. Stock split 4-for-1.

Dec 31: Earned a net income of $800,000 for the current year.

Prepare a statement of retained earnings as of December 31 of the current year. 2.Based on the following income statement and balance sheet for Rashid Corporation, determine the cash flows from operating activities using the indirect method.

Rashid Corporation Income Statement For Year Ended December 31, 2013
Sales		$504,000
Cost of Goods Sold	$327,600
Depreciation Expense	42,000
Other operating expenses	125,000	(495,100)
Other gains (losses):
Gain on sale of equipment		7,200
Income before taxes		16,100
Income Tax expense		(4,800)
Net Income		$11,300

Rashid Corporation Balance Sheets At December 31
	2013	2012
Assets
Cash	$64,650	$55,800
Accounts Receivable	21,000	29,000
Inventory	58,000	52,100
Equipment	240,000	222,000
Accumulated Depreciation	(106,000)	(96,000)
Total Assets	$277,650	$262,900
Liabilities
Accounts Payable	$28,400	$23,700
Income taxes payable	1,050	1,200
Total Liabilities	$29,450	$24,900
Equity
Common Stock	$106,000	$106,000
Contributed Capital in excess of par value	18,000	18,000
Retained Earnings	124,200	114,000
Total equity	$248,200	$238,000
Total liabilities and equity	$277,650	$262,900