Question
Comparative balance sheet accounts of Marcus Inc. are presented below. MARCUS INC. COMPARATIVE BALANCE SHEET ACCOUNTS AS OF DECEMBER 31, 2014 AND 2013 December 31
Comparative balance sheet accounts of Marcus Inc. are presented below. MARCUS INC. COMPARATIVE BALANCE SHEET ACCOUNTS AS OF DECEMBER 31, 2014 AND 2013 December 31 Debit Accounts 2014 2013 Cash $41,620 $33,530 Accounts Receivable 70,230 59,520 Inventory 29,670 24,240 Investments (available-for-sale) 22,480 38,420 Machinery 30,220 18,550 Buildings 67,180 55,820 Land 7,940 7,940 $269,340 $238,020 Credit Accounts Allowance for Doubtful Accounts $2,760 $1,370 Accumulated DepreciationMachinery 6,300 2,140 Accumulated DepreciationBuildings 13,650 8,820 Accounts Payable 35,420 24,560 Accrued Payables 3,076 2,752 Long-Term Notes Payable 20,840 30,790 Common Stock, no-par 149,600 124,500 Retained Earnings 37,694 43,088 $269,340 $238,020 Additional data (ignoring taxes): 1. Net income for the year was $41,086. 2. Cash dividends declared and paid during the year were $21,380. 3. A 20% stock dividend was declared during the year. $25,100 of retained earnings was capitalized. 4. Investments that cost $25,310 were sold during the year for $28,790. 5. Machinery that cost $3,540, on which $743 of depreciation had accumulated, was sold for $1,951. Marcuss 2014 income statement follows (ignoring taxes). Sales revenue $538,102 Less: Cost of goods sold 379,090 Gross margin 159,012 Less: Operating expenses (includes $9,733 depreciation and $5,410 bad debts) 120,560 Income from operations 38,452 Other: Gain on sale of investments $3,480 Loss on sale of machinery (846 ) 2,634 Net income $41,086 (a) Compute net cash flow from operating activities using the direct method. (b) prepare a statement of cash flows using the indirect method
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