260 of 1060> 39 AM Problem 12-38 Indirect: Statement of cash flows Ap2 p3 Gazelle Corporation's current year income statement, comparative balance sheets, and additional information follow. For the year, (1) all sales are credit sales, (2) all credits to Accounts Receivable reflect cash receipts from customers. (3) all purchases of inventory are on credit, (4) all debits to Accounts Payable reflect cash payments for inventory, and (s) Other Expenses are paid in advance and are initially debited to Prepaid Expenses Page 491 GAZELLE CORPORATION Comparative Balance Sheets December 31 Current Year Prior Year 5 61.550 Assets Cash Accounts receivable Inventory Thepaid expenses Total current assets gament Acom.depreciatis-Equipment Total assets Liabilities and Equity SL450 77.100 340.000 15.00 49.5 6.50 (110750 250,700 17.000 410,000 300.000 (95.000 315.000 Liabilities and Equity Accounts payable Short-term notex payable Total current liabilities Long-term bots payable Total liabilities Equity Common stock, Spar Paid in capital in excess of par, common stock Retained ning Total liabilities and equity $ 19.750 15.000 39.750 100.000 332.750 $109,000 10000 112.000 772.500 189.500 315.000 30,000 339,000 56079 000,000 0 12500 SSS.000 GAZELLE CORPORATION Income Statement For Current Year Ended December 31 Sales $185.000 Cost of goods sold 595.000 Grossproti 390.000 Operating expenses Depreciation expense - 18.000 Other experime 362.850 Total operating expeh 401450 6 GAZELLE CORPORATION Income Statement For Current Year Ended December 31 Sales SLIN.000 Cost of sold 525.000 Gross profit 590.000 Operipenses Depreciation expense $ 3.600 Other expenses 362.850 Total operating experies 1450 188.350 Other gala doses) Los role of equipment Income before taxes 186,490 (100) 3100 Additional information Current Year Transactions a. The loss on the cash sale of equipment was $2,100 (details in b). b. Sold equipment costing $51,000, with curated depreciation of $9.850, for $6,00 cash c. Purchased equipment costing $113.250 by paying $43.250 cash and signing a long-term note payable for de Lots on sale of equipment Thcome before taxes Income taxes expense Net income 0.100) 186,450 2350 $158.100 Additional Information on Current Year Transactions a. The loss on the cash sale of equipment was $2,100 (details in b). b. Sold equipment costing $51.000, with accumulated depreciation of $22,850, for $26,050 cash. c. Purchased equipment costing $113.250 by paying $43.050 cash and signing a long-term note pavable for the balance d. Borrowed $5,000 cash by signing a short-term note payable. e. Paid $47.500 cash to reduce the long-term notes payable. Issued 3.000 shares of common stock for $15 cash per share g. Declared and paid cash dividends of $53,600 Required 1. Prepare a complete statement of cash flows using the indirect method for the current year. Disclose any noncash investing and financing activities in a note. Check in 200