Jey Company, a major retailer of bicycles and accessories, operates several stores and is a publicly traded company. The comparative balance sheets and income statement for Jey Company as of May 31, Year 3 (and Year 2), are as follows:

Jey Company

Comparative Balance Sheets

May 31, Years 3 and 2

Year 3 Year 2

Cash $ 28,250 $ 20,000

Accounts receivable 75,000 58,000

Inventory 220,000 250,000

Prepaid expenses 9,000 7,000

Total current assets 332,250 335,000

Plant assets 600,000 502,000

Less: A/D on plant assets 150,000 125,000

Plant assets net 450,000 377,000

Total Assets $782,250 $712,000

Accounts payable $123,000 $115,000

Salaries & wages payable 47,250 72,000

Interest payable 27,000 25,000

Total current liabilities 197,250 212,000

Bonds payable 70,000 100,000

Total liabilities 267,250 312,000

Common stock, $10 par 370,000 280,000

Retained earnings 145,000 120,000

Total stockholders equity 515,000 400,000

Total Liabs. & Stockholders Equity $782.250 $712,000

Jey Company

Income Statement

For the year ended May 31, Year 3

Sales revenue $1,255,250

Cost of goods sold 722,000

Gross profit 533,250

Expenses:

Salaries & wages expense $252,100

Depreciation expense 25,000 277,100

Operating income 256,150

Other income/(expenses):

Interest expense (75,000)

Other expenses (8,150) 83,150

Income before income taxes 173,000

Income tax expense 43,000

Net income $ 130,000

The following additional information is also available concerning Jey's transaction during the year ended May 31, Year 3:

1. All sales during the year were made on account.

2. All merchandise was purchased on account, making up the total of accounts payable.

3. Plant assets costing $98,000 were purchased by paying $28,000 in cash and issuing 7,000

shares of common stock.

4. The other expenses are related to prepaid items.

5. All income taxes incurred during the year were paid during the year.

6. In order to supplement its cash, Connor issued 2,000 shares of common stock at par during the

year.

7. Cash dividends of an unknown amount were declared during Year 3.

Instructions:

Prepare a complete statement of cash flows for Jey Company for Year 3 on the indirect method.