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The management team of Wickersham Brothers Inc. is preparing its annual financial statements. The statements are complete except for the statement of cash flows. The

The management team of Wickersham Brothers Inc. is preparing its annual financial statements. The statements are complete except for the statement of cash flows. The completed comparative balance sheets and income statements are summarized.

Current Year

Prior Year

Balance Sheet
Assets
Cash $ 112,500 $ 130,500
Accounts Receivable 140,000 122,500
Merchandise Inventory 105,000 113,750
Property and Equipment 200,000 105,000
Less: Accumulated Depreciation (58,000 ) (30,000 )

Total Assets $ 499,500 $ 441,750

Liabilities:
Accounts Payable $ 17,500 $ 21,000
Salaries and Wages Payable 3,500 1,750
Notes Payable, Long-Term 87,500 105,000
Stockholders Equity:
Common Stock 160,000 140,000
Retained Earnings 231,000 174,000

Total Liabilities and Stockholders Equity $ 499,500 $ 441,750

Current Year

Income Statement
Sales $ 500,000
Cost of Goods Sold 260,000
Depreciation Expense 28,000
Other Expenses 125,000

Net income $ 87,000

Other information from the companys records includes the following:

Bought equipment for cash, $95,000.

Paid $17,500 on long-term note payable.

Issued new shares of common stock for $20,000 cash.

Cash dividends of $30,000 were declared and paid to stockholders.

Accounts Payable arose from inventory purchases on credit.

Income Tax Expense ($4,000) and Interest Expense ($3,000) were paid in full at the end of both years and are included in Other Expenses.

Required:

Prepare a schedule summarizing operating, investing, and financing cash flows using the T-account approach.

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