direct methods) The comparative balance sheets of Donna Dunn Design Studio, Inc., at June 30, 2016, and 2015, and transaction data for fiscal 2016, are as follows: 1 A1 Donna Dunn Design Studio, Inc. Comparative Balance Sheets D 2 3 4 Current assets: 5 Cash 6 Accounts receivable 7 Inventories 8 Prepaid expenses 9 Land June 30, Increase 2016 2015 (Decrease) $ 28,400 $ 8,100 $ 20,300 48,600 22,100 26.500 98,200 62,900 35,300 1,300 2,600 (1,300) 36,900 102,300 (65,400) 10 Equipment, net 11 Long-term investment 74,400 73,500 900 19,200 5,800 13.400 12 $ 307,000 $277,300 $ 29,700 13 Current liabilities: 14 Notes payable, short-term S 13,100 $ 18,700 $ (5,600) 15 Accounts payable 29,500 40,500 (11.000) 16 Income tax payable 13,600 14.600 (1.000) 17 Accrued liabilities 18,200 9,600 8,600 18 Interest payable 3,600 2,800 800 19 Salary payable 4,700 4,400 300 20 Long-term note payable 21 Common stock 22 Retained earnings 23 47,300 94,400 (47,100) 68,900 47.300 21,600 108,100 45,000 63,100 $ 307,000 $ 277,300 $ 29,700 24 Transaction data for the year ended June 30, 2016, follows: a. Net income, $70,600 b. Depreciation expense on equipment, $13,500 c. Purchased long-term investment with cash, $13,400 d. Sold land for $58,200, including $7,200 loss e. Acquired equipment by issuing long-term note payable, $14,400 f. Paid long-term note payable, $61,500 g. Received cash for issuance of common stock, $16,000 h. Paid cash dividends, $7,500 i. Paid short-term note payable by issuing common stock. $5,600 Requirements 1. Prepare the statement of cash flows of Donna Dunn Design Studio, Inc., for the year ended June 30, 2016, using the indirect method to report operating activities. Also prepare the accompanying schedule of noncash investing and financing activities. All current accounts except Notes Payable, short-term, result from operating transactions. 2. Prepare a supplementary schedule showing cash flows from operations by the direct method. The accounting records provide the following: collections from customers, $239,000; interest received, $1,500; payments to suppliers, $146,900; payments to employees, $48,100; payments for income tax, $12,000; and payment of interest, $5,000.