Question Information:

1st Part of 1st Requirement:

2nd Part of 1st Requirement:

2nd Requirement:

Explanation: Firstly, the information that the reader needs to solve the question is provided. Then, the 1st requirement is divided into 2 parts, seen as "1st Part of 1st Requirement" and "2nd Part of 1st Requirement". And finally, the 2nd requirement is provided. At the beginning of each of these sections (i.e. "1st Part of 1st Requirement", "2nd Part of 1st Requirement" and "2nd Requirement") the empty version of the question is provided. Then, in the consecutive images, the options that the reader can select to prepare the statements can be seen.

Mary McGuire Design Studio, Inc. Comparative Balance Sheets June 30, 2018 2017 Increase (Decrease) Current assets: Cash $ 28,900 $ 1,600 $ 27,300 59,000 52,000 7,000 37,200 60,500 2,100 Accounts receivable Inventories Prepaid expenses Land Equipment, net Long-term investment 97,700 3,700 22,200 74,800 22,000 1,600 (70,600) 92,800 73,300 5,200 1,500 16,800 $ 308,300 $ 287,500 $ 20,800 $ 12,900 $ 19,000 $ 41,500 (6,100) (7,200) (1,400) 14,800 Current liabilities: Notes payable, short-term Accounts payable Income tax payable Accrued liabilities Interest payable Salary payable Long-term note payable Common stock 34,300 13,400 14,900 4,000 9,300 5,600 1,000 3,000 3,200 4,800 1,600 93,800 (43,100) 50,700 68,100 105,200 61,500 41,400 6,600 63,800 Retained earnings $ 308,300 $ 287,500 $ 20,800 Transaction data for the year ended June 30, 2018, follows: a. Net income, $71,000 b. Depreciation expense on equipment, $14,000 c. Purchased a long-term investment with cash, $16,800 d. Sold land for $63,600, including a $7,000 loss e. Acquired equipment by issuing a long-term note payable, $15,500 f. Paid off a long-term note payable, $58,600 g. Received cash for the issuance of common stock, $500 h. Paid cash dividends, $7,200 i. Paid off a short-term note payable by issuing common stock, $6,100 Requirement 1. Prepare the statement of cash flows of Mary McGuire Design Studio for the year ended June 30, 2018, using the indirect method to report operating activities. Also prepare the accompanying schedule of noncash investing and financing activities. All current account changes except for the short-term Notes Payable changes result from operating transactions. Start by completing the cash flows from operating activities using the Indirect method. Then complete the statement of cash flows. (Use parentheses or a minus sign for numbers to be subtracted and for a net decrease in cash.) Mary McGuire Design Studio, Inc. Statement of Cash Flows (Indirect Method) Year Ended June 30, 2018 Cash flows from operating activities: Adjustments to reconcile net income to net cash provided by operating activities: Nel cash provided by used for) operating activities Statement of Cash Flows (Indirect Method) Year Ended June 30, 2018 Cash flows from operating activities: Collections from customers Decrease in income tax payable Increase in prepaid expenses Increase in salary payable Depreciation expense For income tax For interest Decrease in accounts payable Increase in accounts receivable Increase in accrued liabilities Increase in interest payable Increase in inventories Interest received Issuance of common stock Loss on sale of land Net income Payment of cash dividends Payment of long-term note payable Purchase of long-term investment Sale of land To employees To suppliers Ch lue to the next question. Cash flows from operating activities: Adjustments to reconcile net income to net cash provided by operating activities: Collections from customers Decrease in income tax payable Increase in prepaid expenses Increase in salary payable Depreciation expense For income tax For interest Decrease in accounts payable Increase in accounts receivable Increase in accrued liabilities Increase in interest payable Increase in inventories Interest received Issuance of common stock Loss on sale of land Net income Payment of cash dividends Payment of long-term note payable Purchase of long-term investment Ch Sale of land To employees To suppliers iue to the next question. Adjustments to reconcile net income to net cash provided by operating activities: Collections from customers Decrease in income tax payable Increase in prepaid expenses Increase in salary payable Depreciation expense For income tax For interest Decrease in accounts payable Increase in accounts receivable Increase in accrued liabilities Increase in interest payable Increase in inventories Interest received Issuance of common stock Loss on sale of land Net income Payment of cash dividends Payment of long-term note payable Purchase of long-term investment Sale of land To employees To suppliers Ch iue to the next question. net cash provided by operating activities: Collections from customers Decrease in income tax payable Increase in prepaid expenses Increase in salary payable Depreciation expense For income tax For interest Decrease in accounts payable Increase in accounts receivable Increase in accrued liabilities Increase in interest payable Increase in inventories Interest received Issuance of common stock Loss on sale of land Net income Payment of cash dividends Payment of long-term note payable Purchase of long-term investment Sale of land To employees To suppliers Ch iue to the next question. Collections from customers Decrease in income tax payable Increase in prepaid expenses Increase in salary payable Depreciation expense For income tax For interest Decrease in accounts payable Increase in accounts receivable Increase in accrued liabilities Increase in interest payable Increase in inventories Interest received Issuance of common stock Loss on sale of land Net income Payment of cash dividends Payment of long-term note payable Purchase of long-term investment Sale of land To employees To suppliers Choose from any list or enter any number in the input fields and then continue to the next question. Collections from customers Decrease in income tax payable Increase in prepaid expenses Increase in salary payable Depreciation expense For income tax For interest Decrease in accounts payable Increase in accounts receivable Increase in accrued liabilities Increase in interest payable Increase in inventories Interest received Issuance of common stock Loss on sale of land Net income Payment of cash dividends Payment of long-term note payable Purchase of long-term investment Sale of land To employees To suppliers Ch iue to the next question. Collections from customers Decrease in income tax payable Increase in prepaid expenses Increase in salary payable Depreciation expense For income tax For interest Decrease in accounts payable Increase in accounts receivable Increase in accrued liabilities Increase in interest payable Increase in inventories Interest received Issuance of common stock Loss on sale of land Net income Payment of cash dividends Payment of long-term note payable Purchase of long-term investment Sale of land To employees To suppliers Ch lue to the next question. Collections from customers Decrease in income tax payable Increase in prepaid expenses Increase in salary payable Depreciation expense For income tax For interest Decrease in accounts payable Increase in accounts receivable Increase in accrued liabilities Increase in interest payable Increase in inventories Interest received Issuance of common stock Loss on sale of land Net income Payment of cash dividends Payment of long-term note payable Purchase of long-term investment Sale of land To employees To suppliers Collections from customers Decrease in income tax payable Increase in prepaid expenses Increase in salary payable Depreciation expense For income tax For interest Decrease in accounts payable Increase in accounts receivable Increase in accrued liabilities Increase in interest payable Increase in inventories Interest received Issuance of common stock Loss on sale of land Net income Payment of cash dividends Payment of long-term note payable Purchase of long-term investment Sale of land To employees To suppliers Ch jue to the next question. Collections from customers Decrease in income tax payable Increase in prepaid expenses Increase in salary payable Depreciation expense For income tax For interest Decrease in accounts payable Increase in accounts receivable Increase in accrued liabilities Increase in interest payable Increase in inventories Interest received Issuance of common stock Loss on sale of land Net income Payment of cash dividends Payment of long-term note payable Purchase of long-term investment Sale of land Ch To employees To suppliers iue to the next question. Collections from customers Decrease in income tax payable Increase in prepaid expenses Increase in salary payable Depreciation expense For income tax For interest Decrease in accounts payable Increase in accounts receivable Increase in accrued liabilities Increase in interest payable Increase in inventories Interest received Issuance of common stock Loss on sale of land Net income Payment of cash dividends Payment of long-term note payable Purchase of long-term investment Sale of land To employees Ch To suppliers hue to the next question. Cash flows from investing activities: Net cash provided by (used for) investing activities Cash flows from financing activities: Net cash provided by (used for) financing activities Net increase (decrease) in cash IME Noncash investing and financing activities: Total noncash investing and financing activities Cash flows from investing activities: Collections from customers Decrease in income tax payable Increase in prepaid expenses Increase in salary payable Depreciation expense For income tax For interest Decrease in accounts payable Increase in accounts receivable Increase in accrued liabilities Increase in interest payable Increase in inventories Interest received Issuance of common stock Loss on sale of land Net income Payment of cash dividends R Payment of long-term note payable $1 Purchase of long-term investment Sale of land Ch To employees To suppliers erations by the direct method. The accountir and payment of interest, $4,700. (Use parer ue to the next question. Cash flows from investing activities: Collections from customers Decrease in income tax payable Increase in prepaid expenses Increase in salary payable Depreciation expense For income tax For interest Decrease in accounts payable Increase in accounts receivable Increase in accrued liabilities Increase in interest payable Increase in inventories Interest received Issuance of common stock Loss on sale of land Net income Re Payment of cash dividends $1 Payment of long-term note payable Ch Purchase of long-term investment Sale of land To employees erations by the direct method. The accounting rec and payment of interest, $4,700. (Use parenthese ue to the next question. Cash flows from financing activities: Collections from customers Decrease in income tax payable Increase in prepaid expenses Increase in salary payable Depreciation expense For income tax For interest Decrease in accounts payable Increase in accounts receivable Increase in accrued liabilities Increase in interest payable Increase inventories RE Interest received $1 Issuance of common stock Loss on sale of land Net income Payment of cash dividends Payment of long-term note payable Purchase of long-term investment Ch Sale of land To employees To suppliers erations by the direct method. The accou and payment of interest, $4,700. (Use pa lue to the next question. Cash flows from financing activities: Collections from customers Decrease in income tax payable Increase in prepaid expenses Increase in salary payable Depreciation expense For income tax For interest Decrease in accounts payable Increase in accounts receivable Increase in accrued liabilities Increase in interest payable Ro Increase in inventories $1 Interest received Issuance of common stock Loss on sale of land Net income Payment of cash dividends Payment of long-term note payable Purchase of long-term investment Sale of land To employees erations by the direct method. The acc and payment of interest, $4,700. (Use Ch To suppliers ue to the next question. Cash flows from financing activities: RO $1 Collections from customers Decrease in income tax payable Increase in prepaid expenses Increase in salary payable Depreciation expense For income tax For interest Decrease in accounts payable Increase in accounts receivable Increase in accrued liabilities Increase in interest payable Increase in inventories Interest received Issuance of common stock Loss on sale of land Net income Payment of cash dividends Payment of long-term note payable Purchase of long-term investment Sale of land To employees To suppliers erations by the direct method. The accou and payment of interest, $4,700. (Use pa ch jue to the next question. Cash flows from financing activities: Net cash provided by (used for) financing activities Net increase (decrease) in cash Cash balance, June 30, 2017 Cash balance, June 30, 2018 Total cash payments Total cash receipts HII MTU Total noncash investing and financing activities Cash flows from financing activities: Net cash provided by (used for) financing activities Net increase (decrease) in cash ILI HII Cash balance, June 30, 2017 Cash balance, June 30, 2018 Total cash payments Total cash receipts Cash flows from financing activities: Net cash provided by (used for) financing activities Net increase (decrease) in cash HII MITI Noncash investing and financing activities: Acquisition of equipment by issuing long-term note payable Payment of cash dividends Re Payment of short-term note payable by issuing common stock $1 Purchase of long-term investment erations by the direct method. The accounting recor- and payment of interest, $4,700. (Use parentheses Cash flows from financing activities: Net cash provided by (used for) financing activities Net increase (decrease) in cash Noncash investing and financing activities: RO $1 Acquisition of equipment by issuing long-term note payable Payment of cash dividends Payment of short-term note payable by issuing common stock Purchase of long-term investment erations by the direct method. The ac and payment of interest, $4,700. (Us Partial Statement of Cash Flows (Direct Method) Requirement 2. Prepare a supplementary schedule showing cash flows from operations by the direct method. The accounting records provide the following: collections from customers, $260,000; interest received, $1,900; payments to suppliers, $158,600; payments to employees, $40,200; payments for income tax, $12,600; and payment of interest, $4,700. (Use parentheses or a minus sign for numbers to be subtracted and for a net decrease in cash.) Mary McGuire Design Studio, Inc. Partial Statement of Cash Flows (Direct Method) Year Ended June 30, 2018 Cash flows from operating activities: Receipts: Total cash receipts Payments: Total cash payments Net cash provided by (used for) operating activities o, Inc., at June 30, 2018, and 2017, and (Click the icon to view the transa Collections from customers Decrease in income tax payable Increase in prepaid expenses TH Increase in salary payable Depreciation expense Re For income tax For interest Decrease in accounts payable Increase in accounts receivable Increase in accrued liabilities Re Increase in interest payable $1 Increase in inventories Interest received Issuance of common stock Loss on sale of land Net income Payment of cash dividends Payment of long-term note payable Purchase of long-term investment Cola afland ish flows from operations by the direct me tax, $12,600; and payment of interes Inc. ect Method) Total cash receipts Payments: Total cash payments Net cash provided by (used for) operating activities o, Inc., at June 30, 2018, and 2017, and tr (Click the icon to view the transacti Increase in salary payable Depreciation expense Th For income tax For interest Decrease in accounts payable RE Increase in accounts receivable Increase in accrued liabilities Increase in interest payable Increase in inventories Interest received RE Issuance of common stock $1 Loss on sale of land Net income Payment of cash dividends Payment of long-term note payable Purchase of long-term investment Sale of land To employees To suppliers ash flows from operations by the direct met me tax, $12,600; and payment of interest, Inc. ect Method) Total cash receipts Payments: Total cash payments Net cash provided by (used for) operating activities o, Inc., at June 30, 2018, and 2017, and tra i (Click the icon to view the transactic ish flows from operations by the direct meth me tax, $12,600; and payment of interest, $ Collections from customers Decrease in income tax payable TH Increase in prepaid expenses Increase in salary payable Re Depreciation expense For income tax For interest Decrease in accounts payable Increase in accounts receivable Re Increase in accrued liabilities $1 Increase in interest payable Increase in inventories Interest received Issuance of common stock Loss on sale of land Net income Payment of cash dividends Payment of long-term note payable Purchase of long-term investment Sale of land To employees To suppliers Inc. ect Method) Total cash payments Net cash provided by (used for) operating activities o, Inc., at June 30, 2018, and 2017, and (Click the icon to view the transac ish flows from operations by the direct me ne tax, $12,600; and payment of interest Inc. Collections from customers TH Decrease in income tax payable Increase in prepaid expenses RE Increase in salary payable Depreciation expense For income tax For interest Decrease in accounts payable Ro Increase in accounts receivable $1 Increase in accrued liabilities Increase in interest payable Increase in inventories Interest received Issuance of common stock Loss on sale of land Net income Payment of cash dividends Payment of long-term note payable Purchase of long-term investment Sale of land To employees To suppliers ect Method) Total cash payments Net cash provided by (used for) operating activities o, Inc., at June 30, 2018, and 2017, and (Click the icon to view the transa ish flows from operations by the direct n ne tax, $12,600; and payment of interes Inc. TH Collections from customers Decrease in income tax payable RE Increase in prepaid expenses Increase in salary payable Depreciation expense For income tax For interest RI Decrease in accounts payable $1 Increase in accounts receivable Increase in accrued liabilities Increase in interest payable Increase in inventories Interest received Issuance of common stock Loss on sale of land Net income Payment of cash dividends Payment of long-term note payable Purchase of long-term investment Sale of land To employees To suppliers act Method) 1000 Total cash payments Net cash provided by (used for) operating activities ish flows from operations by the direct method. The ne tax, $12,600; and payment of interest, $4,700. (U Inc. act Method) Re Collections from customers Decrease in income tax payable Increase in prepaid expenses Increase in salary payable Depreciation expense For income tax Ro $1 For interest Decrease in accounts payable Increase in accounts receivable Increase in accrued liabilities Increase in interest payable Increase in inventories Interest received Issuance of common stock Loss on sale of land Net income Payment of cash dividends Payment of long-term note payable Purchase of long-term investment Sale of land To employees To suppliers Total cash payments Net cash provided by (used for) operating activities