Problem 14-21A (Algo) Using financial statements to prepare a statement of cash flows-direct method LO 14-2, 14-3, 14-4 The following financial statements were drawn from the records of Fanning Shoes: Balance Sheets As of December 31 Year 2 Year 1 $ Assets Cash Accounts receivable Merchandise inventory Notes receivable Equipment Accumulated depreciation equipment Land Total assets Liabilities Accounts payable Salaries payable Utilities payable Interest payable Notes payable (long-term Common stock Retained earnings Total liabilities and equity $122,740 53,286 129,315 0 143,300 (68,266) 89,000 $469,375 29,360 61,700 117.000 28,800 251,900 (139,610) 57,500 $ 406,650 $ 42,216 33, 275 556 0 0 302, 100 91,220 $469,375 $ 48,850 26,620 1,111 2,150 62,000 241,700 24,219 $ 406,650 Income Statement Tor the Year Ended December 31Year 2 Sales revenue $589, 710 Coat of goods sold (292,821) Gross margin 296,889 Operating expenses salaries expense (183,170) Depreciation expense (15.066) Utilities expense (11.170) Operating income 87,483 Nonoperating items Interest expense (3,499) Loss on the sale of equipment (1,200) Net Income $82,284 Additional Information 1. Sold equipment costing $108,600 with accumulated depreciation of $86,410 for $20,490 cash. 2. Paid a $15,275 cash dividend to owners. Additional Information 1. Sold equipment costing $108,600 with accumulated depreciation of $86,410 for $20,490 cash. 2. Paid a $15,275 cash dividend to owners. Required: Analyze the data and prepare a statement of cash flows using the direct method. (Amounts to be deduc be indicated by a minus sign.) FANNING SHOES Statement of Cash Flows For the Year Ended December 31, Year 2 Cash Flows From Operating Activities: Cash receipts from customers Cash Payments for: Total cash outfiows 0 0 Cash Flows from Investing Activities: 0 Cash Flows from Financing Activities 0 0 Ending cash balance S O