The following balance sheet and income statement data were taken from the records of Standard Center Manufacturing
Question:
The following balance sheet and income statement data were taken from the records of Standard Center Manufacturing for the year ended December 31, 1996. 1996 1995 Balance Sheet Cash $ 20,200 $ 22,800 Accounts receivable 28,800 34,800 Inventory 42,900 43,900 Interest receivable 4,100 6,300 Prepaid rent 3,900 1,200 Total current assets $ 99,900 $109,000 Investments 18,200 23,500 Equipment (net) 43,900 62,500 Total $162,000 $195,000 Accounts payable $ 12,500 $ 8,600 Wages payable 11,100 11,500 Interest payable 1,800 2,100 Dividend payable 900 1,700 Taxes payable 1,200 3,200 Unearned revenue 7,200 9,600 Total current liabilities $ 34,700 $ 36,700 Long-term notes payable (net) 75,400 97,300 Capital stock 25,000 25,000 Retained earnings 26,900 36,000 Total $162,000 $195,000 Income Statement Sales revenues $ 67,500 Service revenue 28,200 Interest revenue 7,300 $103,000 Cost of goods sold (19,500) Wage expense (28,400) Rent expense (21,500) Interest expense (7,200) Depreciation expense (4,300) Loss on sale of investments (17,900) Net income before taxes $ 4,200 Tax expense 1,400 Net income $ 2,800 ADDITIONAL INFORMATION: The Company sells goods and provides services. All sales are made on account, and cash is received in advance on services with service revenues being recognized after services are performed. REQUIRED: Prepare the operating section of the statement of cash flows, and present it under both the direct and the indirect methods.
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