Carmel Company”s comparative balance sheet and income statement for last year appear below:
|
Statement of Financial Position |
||
|
|
Ending |
Beginning |
|
|
Balance |
Balance |
|
Cash |
$ 49,000 |
$ 30,000 |
|
Accounts receivable |
23,000 |
30,000 |
|
Inventory |
63,000 |
49,000 |
|
Prepaid expenses |
13,000 |
19,000 |
|
Long term investments |
260,000 |
200,000 |
|
Plant and equipment |
520,000 |
500,000 |
|
Accumulated depreciation |
(256,000) |
(224,000) |
|
Total assets |
$672,000 |
$604,000 |
|
Accounts payable |
$ 20,000 |
$ 35,000 |
|
Accrued liabilities |
30,000 |
17,000 |
|
Taxes payable |
15,000 |
11,000 |
|
Bonds payable |
100,000 |
150,000 |
|
Deferred taxes |
23,000 |
16,000 |
|
Common stock |
100,000 |
70,000 |
|
Retained earnings |
384,000 |
305,000 |
|
Total liabilities and owners’ equity |
$672,000 |
$604,000 |
|
Income Statement |
|
|
Sales |
$810,000 |
|
Less cost of goods sold |
390,000 |
|
Gross margin |
420,000 |
|
Less operating expenses |
290,000 |
|
Net operating income |
130,000 |
|
Less income taxes |
39,000 |
|
Net income |
$ 91,000 |
The company declared and paid $12,000 in cash dividends during the year.
Required:
Construct in good form the operating activities section of the company”s statement of cash flows for the year using the direct method.