Preparing a Statement of Cash Flows$$Indirect Method

Sketchers Corporation$$s recent comparative balance sheet and income statement follow.

Balance Sheet, December $31$ Prior Year Current Year

Assets

Cash and cash equivalents $$9,600$ $$40,800$

Accounts receivable $($net$)12,00021,600$

Inventory $24,00028,800$

Investment, long$-$term $4,800-$

Plant assets $72,000112,800$

Accumulated depreciation $(12,000)(16,800)$

Total assets $$110,400$ $$187,200$

Liabilities and Stockholders' Equity

Accounts payable $$7,200$ $$12,000$

Notes payable, short$-$term $($nontrade$)9,6007,200$

Notes payable, long$-$term $24,00043,200$

Common stock, no$-$par $60,00096,000$

Retained earnings $9,60028,800$

Total liabilities and stockholders' equity $$110,400$ $$187,200$

Income Statement, For

Year Ended, December $31$ Current Year

Sales revenue $$360,000$

Cost of goods sold $(216,000)$

Gross margin $144,000$

Depreciation expense $(4,800)$

Other operating expenses $(76,800)$

Net income $$62,400$

Additional Information

$1.$ Sold the long$-$term investment at cost$,$ for cash.

$2.$ Declared and paid a cash dividend of $$16,800.$

$3.$ Purchased plant assets that cost $$40,800$; gave a $$28,800$ long$-$term note payable and paid $$12,000$ cash.

$4.$ Paid a $$9,600$ long$-$term note payable by issuing common stock; fair value, $$9,600.$

$5.$ Issued a stock dividend, $$26,400.$

Prepare the statement of cash flows for the current year ended December $31,$ assuming the indirect method is used in presenting cash flows from operating activities.

$$ Note: Indicate a subtraction in the cash flow statement with a negative sign with the amount.

Statement of Cash Flows

For the Year Ended December $31$

Cash flows from operating activities

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Adjustments:

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Cash flows from investing activities

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Cash flows from financing activities

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Noncash Disclosure

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