Preparing the statement of cash flows—direct method The income statement and additional data of Best Corporation follow:
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BEST CORPORATION Income Statement Year Ended June 30, 2012 |
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Revenues: |
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Sales revenue |
$ 231,000 |
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Dividend revenue |
8,000 |
$ 239,000 |
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Expenses: |
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Cost of goods sold |
$ 102,000 |
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Salary expense |
48,000 |
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Depreciation expense |
28,000 |
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Advertising expense |
13,000 |
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Income tax expense |
11,000 |
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Interest expense |
3,000 |
205,000 |
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Net income |
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$ 34,000 |
Additional data follow:
- Collections from customers are $15,500 more than sales.
- Dividend revenue, interest expense, and income tax expense equal their cash amounts.
- Payments to suppliers are the sum of cost of goods sold plus advertising expense.
- Payments to employees are $1,000 more than salary expense.
- Acquisition of plant assets is $102,000.
- Cash receipts from sale of land total $24,000.
- Cash receipts from issuance of common stock total $32,000.
- Payment of long term note payable is $17,000.
- Payment of dividends is $10,500.
- Cash balance, June 30, 2011, was $25,000; June 30, 2012 was $28,000.
Requirement
1. Prepare Best Corporation’s statement of cash flows for the year ended June 30, 2012. Use the direct method.