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23-5 Instructions Prepare a statement of cash flows for Michaels Company using the direct method accompanied by a reconciliation schedule. Assume the short-term investments are

23-5

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Instructions Prepare a statement of cash flows for Michaels Company using the direct method accompanied by a reconciliation schedule. Assume the short-term investments are debt securities, classified as available-for-sale. P23-5 (L02,4) (SCF-Indirect Method) You have completed the field work in connection with your audit of Alexander Corpo- ration for the year ended December 31, 2017. The balance sheet accounts at the beginning and end of the year are shown below. Increase or Dec. 31 2017 Dec. 31, 2016 se ($20,100) 277,900 469,424 741,700 12,000 110,500 2,304 207,000 535,200 52,500 69,000 40,000 4,502 $2,522,030 298,000 353,000 610,000 8,000 Cash Accounts receivable Inventory Prepaid expenses Investment in subsidiary Cash surrender value of life insurance Machinery Buildings Land Patents Copyrights Bond discount and issue costs 116,424 131,700 4,000 110,500 504 1,800 190,000 407,900 52,500 64,000 50,000 17,000 127,300 5,000 (10,000) 4,502 $486,830 $2,035,200 $ 10,650 19,280 70,000 Income taxes payable Accounts payable Dividends payable Bonds payable -8% Bonds payable-12% Allowance for doubtful accounts Accumulated depreciation-buildings Accumulated depreciation- machinery Premium on bonds payable Common stock-no par Paid-in capital in excess of par--common stock Retained earnings-unappropriated 79,600 280,000 $ 90,250 299,280 70,000 125,000 100,000125,000 (4,700) (100,000) 35,300 424,000 173,000 40,000 400,000 130,000 2,400 1,453,200 24,000 43,000 (2,400) 1,176,200 109,000 20,000 $2,522,030 (277,000) 109,000 470,000 (450,000) $2,035,200 $486,830 737

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