APPLY THE CONCEPTS: Prepare the operating activities section

The income statement and comparative balance sheets for Leonardo Inc. can be viewed by clicking on the links below. No depreciable assets were purchased or sold during the period; therefore, the increase in Accumulated Depreciation is due to depreciation expense for the period. Complete the operating activities section of the statement of cash flows. Use a minus sign (-) to indicate an outflow of cash. No sign is needed to indicate an inflow of cash.

+ Income Statement

Leonardo Inc. Income Statement For the Year Ended December 31, 2013 Sales $244,800 Cost of merchandise sold 127,296 Gross profit $117,504 Operating expenses: Depreciation expense $2,560 Other operating expenses 80,672 Total operating expenses 83,232 Income from operations $34,272 Other revenue and expenses: Interest revenue $480 Gain on sale of land 2,240 2,720 Income before taxes $36,992 Income taxes 9,792 Net income $27,200

+ Comparative Balance Sheet

Leonardo Inc. Balance Sheets December 31, 2013 2013 2012 Assets Cash $28,800 $20,800 Accounts receivable (net) 7,200 10,400 Inventories 76,320 72,800 Current assets $112,320 $104,000 Note Receivable 135,520 59,200 Land 47,040 88,800 Equipment 192,400 192,400 Less: Accumulated depreciation 46,960 44,400 Total assets $440,320 $400,000 Liabilities Accounts payable $4,480 $8,800 Wages payable 20,640 17,600 Current liabilities $25,120 $26,400 Note payable 61,600 61,600 Total liabilities $86,720 $88,000 Stockholders' Equity Common stock $68,800 $62,400 Additional paid-in capital 153,200 140,400 Retained earnings 131,600 109,200 Total equity $353,600 $312,000 Total liabilities and equity $440,320 $400,000

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file:/ll MLA F The the increase in Accumulated expense for the period. Complete the operating activities section of For the Year Ended December 31, 2013 127,296 Operating expenses: $2,560 83,232 Total operating expenses $480 2,240 2,720