Question
Financial data of Fancy Footwork Company for 2013 and 2012 are presented below. FANCY FOOTWORK COMPANY COMPARATIVE BALANCE SHEET AS OF DECEMBER 31, 2013 AND
Financial data of Fancy Footwork Company for 2013 and 2012 are presented below. | ||||
FANCY FOOTWORK COMPANY | ||||
COMPARATIVE BALANCE SHEET | ||||
AS OF DECEMBER 31, 2013 AND 2012 | ||||
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| 2013 | 2012 | ||
Cash | $ 260,000 | $ 230,000 | ||
Receivables | $ 156,000 | $ 120,000 | ||
Inventory | $ 180,000 | $ 220,000 | ||
Plant assets | $ 160,000 | $ 135,000 | ||
Accumulated depreciation | $ (80,000) | $ (76,000) | ||
Long-term investments (held-to-maturity) | $ 80,000 | $ 93,000 | ||
| $ 756,000 | $ 722,000 | ||
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Accounts payable | $ 135,000 | $ 122,000 | ||
Accrued liabilities | $ 30,000 | $ 33,100 | ||
Bonds payable | $ 135,000 | $ 166,000 | ||
Common stock | $ 180,000 | $ 165,000 | ||
Retained earnings | $ 276,000 | $ 235,900 | ||
| $ 756,000 | $ 722,000 | ||
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FANCY FOOTWORK COMPANY | ||||
INCOME STATEMENT | ||||
For the year ended Dec 31, 2013 | ||||
Sales | 750000 | |||
Cost of Goods Sold | 530000 | |||
Gross Margin | 220000 | |||
Selling and administrative expenses | 106000 | |||
Income from Operations | 114000 | |||
Other revenues and gains |
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Gain on sale of investments | 7000 | |||
Income before tax | 121000 | |||
Income tax expense | 48400 | |||
Net Income | 72600 | |||
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Additional information: | ||||
During the year, $9000 of common stock was issued in exchange for plant assets. No plant assets were sold in 2012. Cash dividends were $32500. | ||||
Required: | ||||
A) Prepare a statement of cash flows using the indirect method. | ||||
B) Prepare a statement of cash flows using the direct method. (Do not prepare a reconciliation schedule.) | ||||
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