STATEMENT OF CASH FLOWS - 50 POINTS
Colson Company operates several stores and is a publicly traded company. The comparative balance sheet and income statement for Colson as of May 31, 2012, are shown below. The company is preparing its statement of cash flows.
	COLSON COMPANY
	Comparative Balance Sheet
	As of May 31
					2012	2011
	Current Assets
		Cash			$ 29,870	$ 19,780
		Accounts receivable			76,750	56,980
		Inventory			221,310	250,050
		Prepaid expenses			9,120	7,012
			Total current assets		337,050	333,822
	Plant assets
		Plants assets			596,980	502,400
		Less accumulated
			depreciation - plant assets		151,250	124,890
			Net plant assets		445,730	377,510
	Total assets				$ 782,780	$ 711,332
	Current Liabilities
		Accounts payable			$ 122,680	$ 114,950
		Salaries and wages payable			45,270	71,300
		Interest payable			27,150	26,145
			Total current liabilities		195,100	212,395
	Long-term debt
		Bonds payable			71,320	102,200
			Total liabilities		266,420	314,595
	Stockholders' equity
		Common stock, $12 par			370,000	280,000
		Retained earnings			146,360	116,737
			Total stockholders' equity		516,360	396,737
	Total liabilities and stockholders' equity				$ 782,780	$ 711,332
	COLSON COMPANY
	Income Statement
	For the Year Ended May 31, 2012
	Sales					$ 1,256,870
	Cost of goods sold					724,430
		Gross profit				532,440
	Expenses
		Salaries and wages expense				251,150
		Interest expense				75,500
		Depreciation expense				26,360
		Other expenses				8,652
			Total expenses			361,662
	Operating income					170,778
		Income tax expense				42,700
	Net income					$ 128,078
The following is additional information concerning Colson's transactions during the year ended May 31, 2012.
	1. All sales during the year were made on account.
	2. All merchandise was purchased on account, compromising the total accounts payable account.
	3. Plant assets costing $94580 were purchase by paying $24680 in cash and issuing 6990 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, Colson issued 2010 shares of common stock at par value.
	7. Cash dividends of $98455 were declared and paid at the end of the fiscal year.
Instructions
a) Prepare a statement of cash flows for Colson Company for the year ended May 31, 2012, using the direct method of presentation. Be sure to support the statements with the appropriate calculations. (A reconciliation of net income to net cash is not required).
b) Using the indirect method, calculate only the net cash flow from operating activities for Colson Company for the year ended May 31, 2012.