The comparative balance sheets of Sally Fagan Design Studio, Inc., at June 30, 2016, and 2015, and transaction data for fiscal 2016, are as follows:

Transaction data for the year ended June 30, 2016, follows: a. Net income, $70,600 b. Depreciation expense on equipment, $13,200 c. Purchased long-term investment with cash, $14,600 d. Sold land for $39,900, including $6,900 loss e. Acquired equipment by issuing long-term note payable, $13,600 f. Paid long-term note payable, $59,000 g. Received cash for issuance of common stock, $6,900 h. Paid cash dividends, $37,700 i. Paid short-term note payable by issuing common stock, $7,000 Requirements 1. Prepare the statement of cash flows of Sally Fagan Design Studio, Inc., for the year ended June 30, 2016, using the indirect method to report operating activities. Also prepare the accompanying schedule of noncash investing and financing activities. All current accounts except Notes Payable, short-term, result from operating transactions. 2. Prepare a supplementary schedule showing cash flows from operations by the direct method. The accounting records provide the following: collections from customers, $231,600; interest received, $1,200; payments to suppliers, $95,100; payments to employees, $39,100; payments for income tax, $12,100; and payment of interest, $4,400.

A1 Sally Fagan Design Studio, Inc. Comparative Balance Sheets June 30, Increase 2015 (Decrease) 2016 4 Current assets: Cash S 28,400 10,800 S 17600 48,800 31 500 17 1300 6 Accounts receivable Inventories 62,900 5600 68,500 400 2,400 8 Prepaid expenses (46 800 Land 43100 89 9001 10 Equipment, net 74 100 73,700 400 4600 14.600 11 Long-term investment 19,200 S 282.500 S 275 800 6000 13 Current liabilities: IS 13200 20,200 IS (7,000) 14 Notes payable, short-term 29,400 40,400 1000) 15 Accounts payable 13,800 14700 (900) 16 Income tax payable Accrued liabilities 38100 14,900 23,200 100 2500 1600 18 Interest payable 19 Salary payable 1300 4900 6001 20 Long-term note payable 48800 94.200 (45.400) 21 Common stock 65.100 51.200 13.900 22 Retained earnings 65 00 32800 32900 S 282 500 275 800 s