Statement of Cash Flow (Indirect Method). Comparative balance sheet accounts of Marcus Inc. are presented below. .8 MARCUS INC. COMPARATIVE BALANCE SHEET ACCOUNTS AS OF DECEMBER 31, 2010 AND 2009 December 31 Debit Accounts Cash Accounts Receivable Merchandise Inventory Investments (available-for-sale) Machinery Buildings Land 2010 $ 42,000 70,500 30,000 22,250 30,000 67,500 7,500 2009 $ 33,750 60,000 24,000 38,500 18,750 56,250 7,500 $269,750 $238.750 Credit Accounts Allowance for Doubtful Accounts Accumulated Depreciation - Machinery Accumulated Depreciation Buildings Accounts Payable Accrued Payables Long-Term Note Payable Common Stock, no par Retained Earnings $2,250 5,625 13,500 35,000 3,375 21 ,000 150,000 39,000 $ 1,500 2,250 9,000 24,750 2,625 31,000 125,000 42,625 $269.750 $238,750 Additional data (ignoring taxes): 1. Net income for the year was $42,500. 2. Cash dividends declared and paid during the year were $21,125. 3. A 20% stock dividend was declared during the year. $25,000 of retained earnings was capitalized. 4. Investments that cost $25,000 were sold during the year for $28,750. 5. Machinery that cost $3,750, on which $750 of depreciation had accumulated, was sold for $2,200. Marcus's 2010 Income Statement follows (ignoring taxes). Sales $540,000 Less: Cost of goods sold 380,000 160,000 Gross margin Less: Operating expenses includes $8,625 depreciation and $5,400 bad debts) 120.450 Income from operations 39,550 Other: Gain on sale of investments $3,750 (800) Loss on sale of machinery Net income 2,950 $ 42,500 Required: Prepare a complete statement of cash flows using the Indirect Method. (Use the exhibit on page 840 of your text as you model in completing this assignment). 8