This handout is to be use for Part II - Determining Cash Flow Using the Direct Method Money Farm Corporation has provided us with the following partial balance sheet information: End of Beginning Year of Year Accounts Receivable $50,000 $47,000 Inventory 28,000 30,000 Prepaid Insurance 23,000 17,000 Equipment 415,000 380,000 Accumulated Depreciation: Equipment 220,000 200,000 Trade Payables 23,000 20,000 Salaries Payable 33,000 26,000 Unearned Revenue 4,000 12,000 Interest Payable Unamortized Bond Discount Retained Earnings 6,000 10,000 10,000 7,000 185,000 90,000 The company has also provided the following partial income statement data for the current year: Sales $850,000 Cost of Goods Sold 530,000 Insurance Expense 30,000 Salary Expense 150,000 Interest Expense 60,000 Depreciation Expense: Equipment 50,000 25,000 Gain on Sale of Equipment Money Farm had bonds payable outstanding at the beginning of the year, all of which had been originally issued at a discount. It issued additional bonds during the year at a $15,000 discount below their $170,000 par value. All of Money Farm's trade payables are to suppliers of inventory. During the year, the company sold a piece of equipment for cash. It purchased equipment costing $110,000. Dividends Declared and net income were the only items to influence retained earnings during the year. Net income for the year was $120,000.