Problem 23-7 (Part Level Submission)

Chapman Company, a major retailer of bicycles and accessories, operates several stores and is a publicly traded company. The comparative balance sheet and income statement for Chapman as of May 31, 2014, are as follows. The company is preparing its statement of cash flows.

CHAPMAN COMPANY COMPARATIVE BALANCE SHEET AS OF MAY 31
		2014		2013
Current assets
Cash		$28,650		$20,420
Accounts receivable		75,360		58,960
Inventory		220,740		250,400
Prepaid expenses		9,216		7,500
Total current assets		333,966		337,280
Plant assets
Plant assets		600,140		502,910
Less: Accumulated depreciationplant assets		150,800		125,990
Net plant assets		449,340		376,920
Total assets		$783,306		$714,200
Current liabilities
Accounts payable		$123,740		$115,800
Salaries and wages payable		47,450		72,960
Interest payable		27,810		25,960
Total current liabilities		199,000		214,720
Long-term debt
Bonds payable		70,610		100,660
Total liabilities		269,610		315,380
Stockholders equity
Common stock, $10 par		370,200		280,400
Retained earnings		143,496		118,420
Total stockholders equity		513,696		398,820
Total liabilities and stockholders equity		$783,306		$714,200

CHAPMAN COMPANY INCOME STATEMENT FOR THE YEAR ENDED MAY 31, 2014
Sales revenue		$1,256,210
Cost of goods sold		722,580
Gross profit		533,630
Expenses
Salaries and wages expense		252,890
Interest expense		75,120
Depreciation expense		24,810
Other expenses		8,690
Total expenses		361,510
Operating income		172,120
Income tax expense		43,510
Net income		$128,610

The following is additional information concerning Chapmans transactions during the year ended May 31, 2014.

1.		All sales during the year were made on account.
2.		All merchandise was purchased on account, comprising the total accounts payable account.
3.		Plant assets costing $97,230 were purchased by paying $18,130 in cash and issuing 7,910 shares of 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, Chapman issued 1,070 shares of common stock at par value.
7.		Cash dividends of $103,534 were declared and paid at the end of the fiscal year. Using the indirect method, calculate only the net cash flow from operating activities for Chapman Company for the year ended May 31, 2014.