Paris Company presented the following comparative balance sheets at December 31, 2010 and 2011, and the income statement for the year ended December 31, 2011: Paris Company Balance Sheets December 31, 2011 and 2010 December 31, 2011 December 31, 2010 Assets Cash $ 12,200 $ 28,200 Accounts receivable 16,000 18,000 Inventory 19,500 22,000 Prepaid rent 200 300 Total current assets $ 47,900 $ 68,500 Land 54,000 30,000 Equipment 75,000 60,000 Accumulated depreciation (17,000) (4,000) Total assets $159,900 $154,500 Liabilities and stockholders? equity Accounts payable $ 13,000 $ 25,000 Salaries payable 2,000 2,500 Interest payable 2,500 4,000 Income tax payable 6,500 3,000 Dividends payable 4,000 0 Total current liabilities $ 28,000 $ 34,500 Long-term notes payable 10,000 40,000 Common stock, $1 par 30,000 28,000 Preferred stock, $4 par 24,000 10,000 Additional paid-in capital 45,000 30,000 Retained earnings 22,900 12,000 Total liabilities and stockholders? equity $159,900 $154,500 Paris Company Income Statement For the Year Ended December 31, 2006 Sales $ 400,000 Cost of goods sold (250,000) Gross profit $ 150,000 General and administrative expenses $80,000 Salaries expense 31,000 Rent expense 3,600 Depreciation expense 7,000 Total operating expenses (121,600) Other revenue and expenses: Gain on sale of land $ 3,000 Interest revenue 300 Interest expense (2,800) 500 Income before income taxes $ 28,900 Income tax expense (8,000) Net income $ 20,900 Additional information: a. The company declared dividends in the amount of $10,000 during the year. b. Additional land and equipment were purchased for cash. c. Land that had originally cost $9,000 was sold for $12,000 cash. d. All accounts payable are related to merchandise purchases. e. The company uses a perpetual LIFO inventory system and uses straight-line depreciation for all depreciable assets. Required: Prepare the entries necessary to prepare the operating activities section of the statement of cash flows using the direct method.

Paris Company presented the following comparative balance sheets at December 31, 2010 and 2011, and the income statement for the year ended December 31, 2011: Paris Company Balance Sheets December 31, 2011 and 2010 December 31, 2011 December 31, 2010 Assets Cash 12,200 $ 28,200 Accounts receivable 16,000 18,000 Inventory 19,500 22,000 200 300 $ 47,900 $ 68,500 Land 54,000 30,000 Equipment 75,000 60,000 (17,000) (4,000) Prepaid rent Total current assets Accumulated depreciation Total assets $ $159,900 $154,500 $ 13,000 $ 25,000 Salaries payable 2,000 2,500 Interest payable 2,500 4,000 Income tax payable 6,500 3,000 Dividends payable 4,000 0 $ 28,000 $ 34,500 Liabilities and stockholders' equity Accounts payable Total current liabilities Long-term notes payable 10,000 40,000 Common stock, $1 par 30,000 28,000 Preferred stock, $4 par 24,000 10,000 Additional paid-in capital 45,000 30,000 Retained earnings 22,900 12,000 $159,900 $154,500 Total liabilities and stockholders' equity Paris Company Income Statement For the Year Ended December 31, 2006 Sales $ 400,000 Cost of goods sold (250,000 ) Gross profit General and administrative expenses Salaries expense $ 150,000 $80,000 31,000 Rent expense 3,600 Depreciation expense 7,000 Total operating expenses (121,600 ) Other revenue and expenses: Gain on sale of land Interest revenue Interest expense $ 3,000 300 (2,800) 500 Income before income taxes $ Income tax expense 28,900 (8,000 ) Net income $ 20,900 Additional information: a. The company declared dividends in the amount of $10,000 during the year. b. Additional land and equipment were purchased for cash. c. Land that had originally cost $9,000 was sold for $12,000 cash. d. All accounts payable are related to merchandise purchases. e. The company uses a perpetual LIFO inventory system and uses straight-line depreciation for all depreciable assets. Required: Prepare the entries necessary to prepare the operating activities section of the statement of cash flows using the direct method