Sarasota 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 Sarasota as of May 31, 2020, are as follows. The company is preparing its statement of cash flows SARASOTA COMPANY COMPARATIVE BALANCE SHEET AS OF MAY 31 2020 2019 Current assets Cash $28,300 $19,800 Accounts receivable 75.200 58,000 Inventory 219.400 250.200 8.900 6.900 Prepaid expenses Total current assets 331.800 334.900 602.200 505,800 Plant assets Plant assets Less: Accumulated depreciation-plant assets Net plant assets Total assets 148.800 125.800 453,400 380,000 $785,200 $714.900 $122.800 $115,800 Current liabilities Accounts payable Salaries and wages payable Interest payable Total current liabilities 47,000 72,400 27,300 25.100 197.100 213,300 Long-term debt Bonds payable Total liabilities 70,000 100,000 267,100 313,300 370.000 280,000 Stockholders' equity Common stock $10 per Retained earnings Total stockholders' equity Total liabilities and stockholders' equity 148,100 121,600 518,100 401,600 $785,200 $714.900 SARASOTA COMPANY INCOME STATEMENT FOR THE YEAR ENDED MAY 31, 2020 Sales revenue $1.261,300 Cost of goods sold 717.100 Gross profit 544,200 253.100 75.500 23.000 Expenses Salaries and wages expense Interest expense Depreciation expense Other expenses Total expenses Operating income Income tax expense Net income 8.200 359.800 184.400 42.600 $141,800 The following is additional information concerning Sarasota's transactions during the year ended May 31, 2020. 1. 2. 3. 4. All sales during the year were made on account. All merchandise was purchased on account, comprising the total accounts payable account. Plant assets costing $96,400 were purchased by paying $27,400 in cash and issuing 6.900 shares of stock The other expenses" are related to prepaid items. All income taxes incurred during the year were paid during the year. In order to supplement its cash, Sarasota issued 2.100 shares of common stock at par value. Cash dividends of $115,300 were declared and paid at the end of the fiscal year. 5. 6. 7. Prepare a statement of cash flows for Sarasota Company for the year ended May 31, 2020, using the direct method. (A reconciliation of net income to net cash provided is not required. (Show amounts in the investing and financing sections that decrease cash flow with either a - signeg. 15,000 or in parenthesis eg. (15,000:) SARASOTA COMPANY Statement of Cash Flows (Partial) Cash payments:
