The comparative balance sheet of Oak and Tile Flooring Co. for June 30, 2008 and 2007, is as follows:
|
|
June 30, 2008 |
June 30, 2007 |
|
Assets |
|
|
|
Cash |
$ 34,700 |
$ 23,500 |
|
Accounts receivable (net) |
101,600 |
92,300 |
|
Inventories |
146,300 |
142,100 |
|
Investments |
0 |
50,000 |
|
Land |
145,000 |
0 |
|
Equipment |
215,000 |
175,500 |
|
Accumulated depreciation |
(48,600) |
(41,300) |
|
|
$594,000 |
$442,100 |
|
Liabilities and Stockholders’ Equity |
|
|
|
Accounts payable (merchandise creditors) |
$100,900 |
$ 95,200 |
|
Accrued expenses (operating expenses) |
15,000 |
13,200 |
|
Dividends payable |
12,500 |
10,000 |
|
Common stock, $1 par |
56,000 |
50,000 |
|
Paid in capital in excess of par—common stock |
220,000 |
100,000 |
|
Retained earnings |
189,600 |
173,700 |
|
|
$594,000 |
$442,100 |
The income statement for the year ended June 30, 2008, is as follows:
|
Sales |
|
$963,400 |
|
Cost of merchandise sold |
|
662,100 |
|
Gross profit |
|
$301,300 |
|
Operating expenses: |
|
|
|
Depreciation expense |
$ 7,300 |
|
|
Other operating expenses |
195,000 |
|
|
Total operating expenses |
|
202,300 |
|
Operating income |
|
$ 99,000 |
|
Other expenses: |
|
|
|
Loss on sale of investments |
|
(5,000) |
|
Income before income tax |
|
$ 94,000 |
|
Income tax expense |
|
28,100 |
|
Net income |
|
$ 65,900 |
The following additional information was taken from the records:
a. Equipment and land were acquired for cash.
b. There were no disposals of equipment during the year.
c. The investments were sold for $45,000 cash.
d. The common stock was issued for cash.
e. There was a $50,000 debit to Retained Earnings for cash dividends declared.
Instructions
Prepare a statement of cash flows, using the direct method of presenting cash flows from operating activities.