Wilma Company had the following information available at the end of 2018:

Sales 441,000 Cost of Goods Sold 205,200 Gross Profit 235,800 Operating Expenses: Depreciation 14,800 Salaries 79,400 Insurance 10,300 Utilities 11,900 Total Operating Expenses 116,400 Operating Income 119,400 Other Expenses/Losses: Gain on Sale of Equipment 4,500 Interest Expense 6,400 (1,900) Income Before Taxes 117,500 Income Tax Expense 19,900 Net Income 97,600

The following additional information is available:

a. Investments costing $38,000 were purchased for cash.

b. Equipment costing $20,000 with accumulated depreciation of $2,300 was sold for $22,200 cash.

c. Equipment costing $90,000 was purchased--$60,000 cash was paid and a $30,000 long-term promissory note was signed for the balance due.

d. A cash dividend of $45,000 was declared and paid to shareholders during the year.

e. $1,000 of the long-tern note payable was paid.

f. 5,000 shares of $1-par value common stock were issued for $3 per share cash.

g. Land costing $24,700 was sold for $24,700 cash.

A. Make a set of cash flow T-accounts using the indirect method of computing cash flows from operations.

B. Make a set of cash flow T-accounts using the direct method of computing cash flows from operations.

CHAPTER 13 CHECKPOINT PROBLEM #2 Wilma Company had the following information available at the end of 2018: Income Statement For Year Ended December 31, 2018 Sales 441,000 Cost of Goods Sold 205,200 Gross Profit 235,800 Operating Expenses: Depreciation 14,800 Salaries 79,400 Insurance 10,300 Utilities 11,900 Total Operating Expenses 116,400 Operating Income 119,400 Other Expenses/Losses: Gain on Sale of Equipment 4,500 Interest Expense 6,400 (1,900) Income Before Taxes 117,500 Income Tax Expense 19,900 Net Income 97,600 The following additional information is available: a. Investments costing $38,000 were purchased for cash. b. Equipment costing $20,000 with accumulated depreciation of $2,300 was sold for $22,200 cash. c. Equipment costing $90,000 was purchased--$60,000 cash was paid and a $30,000 long-term promissory note was signed for the balance due. d. A cash dividend of $45,000 was declared and paid to shareholders during the year. e. $1,000 of the long-tern note payable was paid. f. 5,000 shares of $1-par value common stock were issued for $3 per share cash. g. Land costing $24,700 was sold for $24,700 cash. REQUIRED: A. Complete a set of cash flow T-accounts using the indirect method of computing cash flows from operations. B. Complete a set of cash flow T-accounts using the direct method of computing cash flows from operations. Beg OPERATING: CASH 15,800 Beg End Beg Accounts Receivable 26,500 25,800 Prepaid Insurance 14,900 71,100 Beg Investments 25,000 63,000 End Beg Land 34,700 Beg Equipment 184,000 End 10,000 End 254,000 Salaries Payable 15,500 18,000 Beg End Beg End Long-Term Notes Payable 73,000 Beg 102,000 End End 20,000 99,600 FINANCING: Merchandise Inventory 64,600 End Accum. Depr.-Equip. 87,100 INVESTING: Beg End APIC 52,700 Beg 62,700 End Accounts Payable 35,500 30,000 Income Taxes Payable 13,000 12,100 Common Stock, $1-par 50,000 55,000 Retained Earnings 38,700 Beg End Beg End Beg End Beg 26,800 91,300 End Beg OPERATING: Cash Receipts From: CASH 15,800 Beg Cash Payments For: End Beg Accounts Receivable 26,500 25,800 Prepaid Insurance 14,900 71,100 Beg Investments 25,000 63,000 End Beg Land 34,700 Beg Equipment 184,000 End 10,000 End 254,000 Salaries Payable 15,500 18,000 Beg End Beg End Long-Term Notes Payable 73,000 Beg 102,000 End End 20,000 99,600 FINANCING: Merchandise Inventory 64,600 End Accum. Depr.-Equip. 87,100 INVESTING: Beg End APIC 52,700 Beg 62,700 End Accounts Payable 35,500 30,000 Income Taxes Payable 13,000 12,100 Common Stock, $1-par 50,000 55,000 Retained Earnings 38,700 Beg End Beg End Beg End Beg 26,800 91,300 End