Exercise 13-8 (Appendix 13A) Net Cash Provided by Operating Activities (Direct Method) Refer to the data for Holly Conpany in Exercise 13-7. Using the Direct Method, convert the company's income statement to a cash basis.

Amount 300 decrease 5.200 increase increase decrease decrease increase nerease o Expen Deferred Incom Saie of equipme Lability of long-term stments gain loss Required: each item, place an X in the Add or Deduct column to indicate whether the dol added to or de lar amount should be provided by op. ducted from net income under the indirect method when computing the cash erating activities for the year. Use the following column headings in pr ltem Amount Add Deduct EXERCISE 13-7 Prepare a Statement of Cash Flows (Indirect Method) (LO2, Lo3) Comparative financial statement data for Holly Company are given below December 31 2002 2001 Cash Accounts receivable Plant and equipment Accumulated depreciation Total assets 36 75 210 (40) $285 29 61 180 (30) $247 Accounts payable. Common stock Retained earnings Total liabilities and stockholders' equity s 45 $ 39 70 1S0 138 $247 90 $285 For 2002, the company reported net income as follows: Sales Less cost of goods sold Gross margin Less operating expenses . Net income . $500 300 200 80 $ 20 Dividends of $8 were declared and paid during 2002. There were no sales of plant and equipment duning the year Required: Using the indirect method, prepare a statement of cash flows for 2002. EXERCISE 13-8 (Appendix 13A) Net Cash Provided by Operating Activities (Direct Method) (LO4) Refer to the data for Holly Company in Exercise 13-7 Required: Using the direct method, convert the company's income statement to a cash basis