To prepare the cash flow statement, accountants for Fothingham Sales Ltd. have summarized 2017 activity in two T-accounts as follows:

Fothingham Sales Ltd.'s 2017 income statement and selected balance sheet data follow:

FOTHINGHAM SALES LTD.
Balance Sheet Data
For the Year Ended October 31, 2017
Increase
(Decrease)
Current assets
Cash and cash equivalents ............................................ $ ?
Accounts receivable ................................................... 10,000
Inventories .............................................................. 5,700
Prepaid expenses ...................................................... (1,900)
Investments ............................................................ (27,700)
Plant and equipment, net ............................................. 69,000
Land .................................................................... 75,000
Current liabilities
Accounts payable ..................................................... 7,700
Interest payable ....................................................... 2,300
Salaries payable ....................................................... (700)
Other accrued liabilities .............................................. (3,300)
Income tax payable ................................................... 3,200
Long-term debt ...................................................... (100,000)
Common shares ...................................................... 146,500
Retained earnings ..................................................... 62,500
Required
1. Prepare Fothingham Sales Ltd.'s cash flow statement for the year ended October 31, 2017, using the direct method to report operating activities. Also prepare a note to the financial statements summarizing the non-cash investing and financing activities.
2. Prepare a schedule showing cash flows from operating activities using the indirect method. All activity in the current accounts results from operations.

Transcribed Image Text:

Cash Beginning balance Sale of common shares Receipts of dividends Sale of investments Receipts of interest Collections from customers 87,100 Payments of operating expenses 80,800 Payme 17900Repurchase of common s 28,400 Payment of income tax 22,200 Payments on accounts payable 307,000 Payments of dividends 46,100 78,900 30,400 6,000 101,600 16,000 67,500 41,800 79,900 nt of long-term debt shares Payments of salaries and wa Payments of interest Purchase of equipment ges Ending balance 75,200 Common Shares 30,400 Beginning balance Repurchase of common shares Issuance for cash Issuance to acquire land Issuance to retire long-term debt Ending balance 103,500 80,800 64,500 31,600 250,000 FOTHINGHAM SALES LTD. Income Statement For the Year Ended October 31,2017 Revenues and gains Sales revenue Interest revenue Dividend revenue Gain on sale of investments $317,000 22,200 17,900 700 357,800 Total revenues and gains Expenses: Cost of goods sold Salaries and wages expense Amortization expense Other operating expenses Interest expense Income tax expense $103,600 66,800 10,900 44,700 44,100 9,200 279,300 $ 78,500 Total expenses Net income