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PROBLEM#1: StatementofCashFlow TomandCompanyreportsthefollowingincomestatementfortheyearendedDecember31, 2012: Sales $2,100,000 Costofgoodssold 831,600 Grossprofit 1,268,400 Depreciationexpense 88,000 Sellingandadministrativeexpense 758,000 Incomebeforetax 422,400 Incometaxexpense 168,960 Netincome $253,440 Thecompanyalsoreportsthefollowinginformationfromthebalancesheet: December31, 2012 December31, 2011

PROBLEM#1:

StatementofCashFlow

TomandCompanyreportsthefollowingincomestatementfortheyearendedDecember31,

2012:

Sales

$2,100,000

Costofgoodssold

831,600

Grossprofit

1,268,400

Depreciationexpense

88,000

Sellingandadministrativeexpense

758,000

Incomebeforetax

422,400

Incometaxexpense

168,960

Netincome

$253,440

Thecompanyalsoreportsthefollowinginformationfromthebalancesheet:

December31,

2012

December31,

2011

Cash

$90,000

$24,000

Accountsreceivable

80,000

60,000

Inventory

14,000

16,000

Accountspayable

150,000

170,000

Accruedsellingandadminexpenses

12,000

8,000

Taxespayable

204,000

82,000

Dividendspayable

20,000

44,000

Required:

a.Prepare,ingoodform,theoperatingsectionofthestatementofcashflow,usingthe

direct

methodforTomandCompanyforDecember31,2012.

b.Prepare,ingoodform,theoperatingsectionofthestatementofcashflow,usingthe

indirect

methodforTomandCompanyforDecember31,2012

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