Cash		$53,320		$65,200
Accounts receivable (net)		81,920		87,890
Merchandise inventory		117,030		108,950
Prepaid expenses		4,770		3,300
Equipment		238,400		195,180
Accumulated depreciation-equipment		(61,980)		(47,870)
	Total assets	$433,460		$412,650
Liabilities and Stockholders' Equity
Accounts payable (merchandise creditors)		$91,030		$86,240
Mortgage note payable		0		123,800
Common stock, $1 par		14,000		9,000
Excess of paid-in capital over par		191,000		116,000
Retained earnings		137,430		77,610
	Total liabilities and stockholders equity	$433,460		$412,650

Additional data obtained from the income statement and from an examination of the accounts in the ledger for 20Y8 are as follows:

1. Net income, $153,140.
2. Depreciation reported on the income statement, $30,310.
3. Equipment was purchased at a cost of $59,420, and fully depreciated equipment costing $16,200 was discarded, with no salvage realized.
4. The mortgage note payable was not due for six years, but the terms permitted earlier payment without penalty.
5. 5,000 shares of common stock were issued at $16 for cash.
6. Cash dividends declared and paid, $93,320.

Required:

Prepare a statement of cash flows, using the indirect method of presenting cash flows from (used for) operating activities. Use the minus sign to indicate cash outflows, cash payments, decreases in cash, or any negative adjustments.

Cash flows from (used for) operating activities:	blank
Common stockDepreciation expenseInventoryNet incomeRetained earnings	$- Select -
Adjustments to reconcile net income to net cash flows from (used for) operating activities:	blank
Cash dividendsDecrease in accounts receivableDepreciationNet incomeRetained earnings	- Select -
Changes in current operating assets and liabilities:	blank
Decrease in accounts payableDecrease in accounts receivableDecrease in inventoryDepreciationIncrease in accounts receivable	- Select -
Decrease in accounts payableDecrease in merchandise inventoryDecrease in prepaid expensesIncrease in accounts receivableIncrease in merchandise inventory	- Select -
Decrease in accounts payableDecrease in inventoryDecrease in prepaid expensesIncrease in prepaid expensesDepreciation	- Select -
Decrease in accounts payableDecrease in prepaid expensesDepreciationIncrease in accounts payableNet income	- Select -
Net cash flows from operating activities	blank	$fill in the blank 13
Cash flows from (used for) investing activities:	blank
Cash received from issuing common stockCash paid for equipmentCash dividendsCash paid for prepaid expensesCash paid to retire mortgage note	$- Select -
Net cash flows used for investing activities	blank	fill in the blank 16
Cash flows from (used for) financing activities:	blank
Cash received from customersCash received from depreciationCash received from net incomeCash received from retained earningsCash received from issuing common stock	$- Select -
Cash paid for accounts payableCash dividendsCash paid for equipmentCash paid for inventoryCash paid for prepaid expenses	- Select -
Cash paid for accounts payableCash paid for accumulated depreciationCash paid for depreciationCash paid for inventoriesCash paid to retire mortgage note payable	- Select -
Net cash flows from financing activities	blank	fill in the blank 23
DepreciationNet decrease in cashNet incomeNet increase in cashNet loss	blank	$- Select -
Cash balance, January 1, 20Y8	blank	fill in the blank 26
Cash balance, December 31, 20Y8

Cash Flows from (Used for) Operating ActivitiesDirect Method

The cash flows from (used for) operating activities are reported by the direct method on the statement of cash flows. Determine the following:

a. If sales for the current year were $684,500 and accounts receivable decreased by $45,900 during the year, what was the amount of cash received from customers? $fill in the blank 1

b. If income tax expense for the current year was $46,700 and income tax payable decreased by $5,600 during the year, what was the amount of cash paid for income taxes? $fill in the blank 2

c. Briefly explain why the cash received from customers in part (a) is different from sales. Because the customers paid

lessmore

than the amount of sales for the period, cash received from customers

exceededis less than

sales made on account by $45,900 during the current year.

Adjustments to Net IncomeIndirect Method

Kingston Corporation's accumulated depreciationequipment account increased by $3,800, while $2,500 of patent amortization was recognized between balance sheet dates. There were no purchases or sales of depreciable or intangible assets during the year. In addition, the income statement showed a gain of $2,900 from the sale of investments.

Reconcile a net income of $43,300 to net cash flows from operating activities. $fill in the blank 1