The income statement and other selected data for Boyer Company follow:
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BOYER COMPANY |
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Sales |
$19,000 |
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Operating expenses: |
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Depreciation expense |
$2,300 |
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Other operating expenses |
12,000 |
14,300 |
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Operating income |
4,700 |
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Loss on sale of land |
1,500 |
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Income before tax expense |
3,200 |
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Tax expense |
1,000 |
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Net income |
$2,200 |
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Supplemental information: |
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a. Dividends declared and paid |
$800 |
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b. Land purchased |
3,000 |
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c. Land sold |
500 |
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d. Equipment purchased |
2,000 |
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e. Bonds payable retired |
2,000 |
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f. Common stock sold |
1,400 |
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g. Land acquired in exchange for common stock |
3,000 |
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h. Increase in accounts receivable |
400 |
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i. Increase in inventories |
800 |
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j. Increase in accounts payable |
500 |
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k. Decrease in income taxes payable |
400 |
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Required
a. Prepare a schedule of change from an accrual basis to a cash basis income statement.
b. Using the schedule of change from accrual basis to cash basis income statement computed in (a), present the cash provided by operations, using (1) the direct approach and (2) the indirect approach.