22.5

Swifty Company, a major retailer of bicycles and accessories, operates several stores and is a publicly traded company. The comparative balance sheet and income statement for Swifty as of May 31, 2025, are as follows. The company is preparing its statement of cash flows. Current liabilities Accounts payable Salaries and wages payable Interest payable Total current liabilities Long-term debt Bonds payable Total liabilities Stockholders' equity Commonstock, \$10 par Retained earnings Total stockholders' equity Total liabilities and stockholders equity \begin{tabular}{rr} $123,800 & $116,000 \\ 46,800 & 71,800 \\ 27,000 & 25,100 \\ \hline 197,600 & 212,900 \\ \hline \end{tabular} 267,60070,000312,900100,000 Swifty Company Income Statement For the Year Ended May 31, 2025 Sales revenue $1,267,000 Cost of goods sold 721,600545,400 Gross profit Expenses Salaries and wages expense 253,400 Interest expense 75,200 Depreciation expense 25,000 Other expenses Total expenses Operating income 8,200 Income tax expense Net income 361,800183,60043,300$140,300 The following is additional information concerning Swifty's transactions during the year ended May 31, 2025. 1. All sales during the year were made on account. 2. All merchandise was purchased on account, comprising the total accounts payable account. 3. Plant assets costing $92,700 were purchased by paying $22,700 in cash and issuing 7,000 shares of stock. 4. The 'other expenses" are related to prepaid itens. 5. All income taxes incurred during the year were paid during the vear. 6. In order to supplement its cash, Swifty issued 2,000 shares of common stock at par value. 7. Cash dividends of $120,800 were declared and paid at the end of the fiscal year: (b) Prepare a statement of cash flows for Swifty Company for the year ended May 31.2025, using the direct method. (A reconciliation of net income to net cash provided is not required) (Show amounts in the investing and financing sections that decrease cash fow with either a - sign e.g. - 15,000 or in parenthesis e.g. (15,000)