34 P12-66A. (Learning Objectives 2, 3, 4: Prepare the statement of cash flows-indirect and direct methods) The comparative balance sheets of Donna Dunn Design Studio, Inc. at June 30, 2016, and 2015, and transaction data for fiscal 2016, are as follows: Donna Dunn Design Studia, Inc. Comparative Balance Sheets June 30, 2016 2015 Increase (Decrease) 4 Current assets 5 6 B Cash Accounts receivable Inventories Prepaid expenses Land 10 Equipment, net 11 Long-term investment 12 $28.400 S 100 $ 20.300 48.600 22.100 26,500 98,200 62.900 35.300 1300 2600 (1.300 36.900 102.300 5,400 74,400 73.500 900 19200 5800 11,400 $303.0005 277.300 5 29.700 13 Current liabilities 14 Notes payable, short-term $ 13,100 $18,700 $ 15.000 15 Accounts payable 29.500 40.500 01,000 16 Income tax payable 13,600 14100 (1.000 17 Accrued liabilities 18.200 9500 600 18 Interest payable 3.600 2.800 800 19 Salary payable 20 Long-term note payable 21 Common stock 22 Retained earnings 4700 4400 300 47.300 94,400 (47.100 68.900 47.300 21,600 208.100 45,000 63.100 23 $307,000 5 277.300 5 29,700 Transaction data for the year ended June 30, 2016, follows: a. Net income, $70,600 b. Depreciation expense on equipment, $13.500 c. Purchased long-term investment with cash. $13,400 d. Sold land for $58.200, including $7,200 loss e. Acquired equipment by issuing long-term note payable. $14,400 f. Paid long-term note payable. $61.500 Received cash for issuance of common stock $16,000 h. Paid cash dividends, $7,500 i. Paid short-term note payable by issuing common stock, $5,600 Requirements 1. Prepare the statement of cash flows of Donna Dunn Design Studio, Inc., for the year ended June 30, 2016, using the indirect method to report operating activities. Also prepare the accompanying schedule of noncash investing and financing activities. All current accounts except Notes Payable, short-term, result from operating transactions. 2. Prepare a supplementary schedule showing cash flows from operations by the direct method. The accounting records provide the following collections from customers, $239,000, interest received. $1.500, payments to suppliers, $146.900: payments to employees, $48,100 payments for income tax. $12,000, and payment of interest, $5,000.