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Mary Kay Cosmetics
Selected data and additional information from the companys records are presented below:
Balance Sheet Data 20X1 20XX
Cash $235,000 246,000
Accounts receivable $120,000 $150,000
Inventories 56,000 50,000
Accounts payable 38,000 70,000
Salaries payable 10,000 5,000
Equipment 110,000 70,000
Accumulated depreciation 28,000 32,000
Bonds payable 100,000 200,000
Common stock 300,000 200,000
Retained earnings 76,000 40,000
Income Statement Data 20X1
Net sales $920,000
Cost of goods sold 700,000
Operating expenses (excluding depreciation expense) 160,000
Net income (Includes depreciation expense and gain) 56,000
Gain on sale of equipment 4,000
Equipment with a cost of $30,000 and a book value of $18,000 was sold for $22,000 during 20X1.
Common stock was issued to retire bonds payable during 20X1.
The only items affecting retained earnings in 20X1 were net income and dividends declared and paid.
1. Prepare the companys statement of cash flows for the year ended December 31, 20X1. Use the indirect method of determining net cash flows from operating activities.