a. Purchased investment securities for $6,700 cash. b. Borrowed $18,400 on a two-year, 8 percent interest-bearing note. c. During the year, sold machinery for its carrying amount; received $13,550 in cash. d. Purchased machinery for $53,400; paid $10,700 in cash and signed a four-year note payable to the dealer for $42,700. e. Declared and paid a cash dividend of $11,700 on December 31 of the current year. Selected account balances at December 31 of the current and prior years are as follows: December 31 Current Prior Year Year Cash Accounts receivable Inventory Accounts payable Accrued wages payable Income tax payable $87,900 $22,700 18,700 12,850 53,700 63,400 8,700 13,400 1,650 2,700 6,700 3,850 One-fourth of the sales and one-third of the purchases were made on credit. FRANK CORPORATION Statement of Earnings For the Current Year Ended December 31 Sales revenue $434,000 Cost of sales 285,000 Gross profit 149,000 Expenses Salaries and wages $52,700 Depreciation 10,900 Rent (no accruals) 7,500 Interest (no accruals) 13,900 Income tax 13,500 Total expenses 98,500 Net earnings $ 50,500 Required: 1. Prepare a statement of cash flows for the year ended December 31 of the current year by using the indirect method. (Negativ answers should be indicated by a minus sign.) FRANK CORPORATION Statement of Cash Flows For the Year Ended December 31 Current Year Cash flows from operating activities: Prev 1 of Next