23-6

Comparative balance sheet accounts of Marcus Inc. are presented below.

MARCUS INC. COMPARATIVE BALANCE SHEET ACCOUNTS AS OF DECEMBER 31, 2014 AND 2013
December 31
Debit Accounts	2014	2013
Cash	$41,560	$33,880
Accounts Receivable	70,710	60,180
Inventory	29,920	24,710
Investments (available-for-sale)	22,020	38,740
Machinery	29,550	19,210
Buildings	67,770	56,490
Land	7,690	7,690
$269,220	$240,900
Credit Accounts
Allowance for Doubtful Accounts	$2,990	$1,170
Accumulated DepreciationMachinery	6,240	2,170
Accumulated DepreciationBuildings	14,130	8,160
Accounts Payable	35,130	24,490
Accrued Payables	3,145	2,733
Long-Term Notes Payable	20,940	31,490
Common Stock, no-par	149,900	124,400
Retained Earnings	36,745	46,287
$269,220	$240,900

Additional data (ignoring taxes):

1.	Net income for the year was $36,718.
2.	Cash dividends declared and paid during the year were $20,760.
3.	A 20% stock dividend was declared during the year. $25,500 of retained earnings was capitalized.
4.	Investments that cost $25,390 were sold during the year for $28,740.
5.	Machinery that cost $4,080, on which $772 of depreciation had accumulated, was sold for $2,446.

Marcuss 2014 income statement follows (ignoring taxes).

Sales revenue	$534,050
Less: Cost of goods sold	379,000
Gross margin	155,050
Less: Operating expenses (includes $10,812 depreciation and $5,640 bad debts)	120,820
Income from operations	34,230
Other: Gain on sale of investments	$3,350
Loss on sale of machinery	(862	)	2,488
Net income	$36,718

(a) Compute net cash flow from operating activities using the direct method. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)

Net cash flow from operating activities

$

(b) Prepare a statement of cash flows using the indirect method. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)

ALEXANDER CORPORATION Statement of Cash Flows For the Year Ended December 31, 2014 (Indirect Method)

$

Adjustments to reconcile net income to

$

$