Data table Current assets: Cash Accounts receivable Inventories Prepaid expenses Land Equipment, net Long-term investment Franny Franklin Design Studio, Inc. Comparative Balance Sheets - June 30, Increase 2021 2020 (Decrease) $ 20,500 $ 8,500 $ 12,000 59,000 31,700 27,300 97,900 63,100 34,800 4,700 3,100 1,600 37,400 95,600 (58,200) 75,100 73,300 1,800 19,100 5,400 13,700 $ 313,700 $ 280,700 $ 33,000 Current liabilities: Notes payable, short-term $ 13,400 $ 22,900 $ (9,500) Accounts payable 29,800 41,200 (11,400) Income tax payable Accrued liabilities Interest payable Salary payable Long-term note payable Common stock Retained earnings 13,700 15,200 (1,500) 30,900 9,100 21,800 3,300 2,200 1,100 4,400 4,100 300 50,600 96,000 (45,400) 65,400 51,800 13,600 102,200 38,200 64,000 $ 313,700 $ 280,700 $ 33,000 Transaction data for the year ended June 30, 2021, follows: a. Net income, $72,000 b. Depreciation expense on equipment, $13,700 c. Purchased a long-term investment with cash, $13,700 d. Sold land for $51,500, including a $6,700 loss e. Acquired equipment by issuing a long-term note payable, $15,500 f. Paid off a long-term note payable, $60,900 g. Received cash for the issuance of common stock, $4,100 h. Paid cash dividends, $8,000 i. Paid off a short-term note payable by issuing common stock, $9,500 The comparative balance sheets of Franny Franklin Design Studio, Inc., at June 30, 2021, and 2020, and transaction data for fiscal 2021, are as follows: (Click the icon to view the comparative balance sheet.) (Click the icon to view the transaction data.) Read the requirements. Requirement 1. Prepare the statement of cash flows of Franny Franklin Design Studio for the year ended June 30, 2021, using the indirect method to report operating activities. Also prepare the accompanying schedule of noncash investing and financing activities. All current account changes except for the short-term Notes Payable changes result from operating transactions. Start by completing the cash flows from operating activities using the indirect method. Then complete the statement of cash flows. (Use parentheses or a minus sign for numbers to be subtracted and for a net decrease in cash.) Franny Franklin Design Studio, Inc. Statement of Cash Flows (Indirect Method) Cash flows from operating activities: Adjustments to reconcile net income to Year Ended June 30, 2021 net cash provided by operating activities: Net cash provided by (used for) operating activities Cash flows from investing activities: Net cash provided by (used for) investing activities Cash flows from financing activities: Net cash provided by (used for) financing activities Net increase (decrease) in cash Noncash investing and financing activities: Total noncash investing and financing activities Requirement 1. Prepare the statement of cash flows of Franny Franklin Design Studio for the year ended June 30, 2021, using the indirect method to report operating activities. Also prepare the accompanying schedule of noncash investing and financing activities. All current account changes except for the short-term Notes Payable changes result from operating transactions. Start by completing the cash flows from operating activities using the indirect method. Then complete the statement of cash flows. (Use parentheses or a minus sign for numbers to be subtracted and for a net decrease in cash.) Franny Franklin Design Studio, Inc. Statement of Cash Flows (Indirect Method) Cash flows from operating activities: Year Ended June 30, 2021 Collections from customers Decrease in income tax payable Increase in prepaid expenses Increase in salary payable Depreciation expense For income tax For interest Decrease in accounts payable Increase in accounts receivable Increase in accrued liabilities Increase in interest payable Increase in inventories Interest received Issuance of common stock Loss on sale of land Net income Payment of cash dividends Payment of long-term note payable Purchase of long-term investment R Sale of land to To employees To suppliers Cash flows from operating activities: erations by the direct method. The accounting records provide the following: collections from customers, $238,200; interest received, $1,700; payments ax, $13,200; and payment of interest, $5,000. (Use parentheses or a minus sign for numbers to be subtracted and for a net decrease in cash.) Requirement 2. Prepare a supplementary schedule showing cash flows from operations by the direct method. The accounting records provide the following: collections from customers, $238,200; interest received, $1,700; payments to suppliers, $144,500; payments to employees, $38,200; payments for income tax, $13,200; and payment of interest, $5,000. (Use parentheses or a minus sign for numbers to be subtracted and for a net decrease in cash.) Franny Franklin Design Studio, Inc. Partial Statement of Cash Flows (Direct Method) Year Ended June 30, 2021 Cash flows from operating activities: Receipts: Total cash receipts Payments: Total cash payments Net cash provided by (used for) operating activities