During the year, $9000 of common stock was issued in exchange for plant assets. No plant assets were sold in 2015. Cash dividends were $32500.

Problems:

Financial data of Fancy Footwork Company for 2016 and 2015 are presented below.

FANCY FOOTWORK COMPANY

COMPARATIVE BALANCE SHEET

AS OF DECEMBER 31, 2016 AND 2015

2016

2015

Cash

$ 260,000

$ 230,000

Receivables

$ 156,000

$ 120,000

Inventory

$ 180,000

$ 220,000

Plant assets

$ 160,000

$ 135,000

Accumulated depreciation

$ (80,000)

$ (76,000)

Long-term investments (held-to-maturity)

$ 80,000

$ 93,000

$ 756,000

$ 722,000

Accounts payable

$ 135,000

$ 122,000

Accrued liabilities

$ 30,000

$ 33,100

Bonds payable

$ 135,000

$ 166,000

Common stock

$ 180,000

$ 165,000

Retained earnings

$ 276,000

$ 235,900

$ 756,000

$ 722,000

FANCY FOOTWORK COMPANY

INCOME STATEMENT

For the year ended Dec 31, 2016

Sales

750000

Cost of Goods Sold

530000

Gross Margin

220000

Selling and administrative expenses

106000

Income from Operations

114000

Other revenues and gains

Gain on sale of investments

7000

Income before tax

121000

Income tax expense

48400

Net Income

72600

Additional information:

During the year, $9000 of common stock was issued in exchange for plant assets. No plant assets were sold in 2015. Cash dividends were $32500.

Required:

A) Prepare a statement of cash flows using the indirect method.

B) Prepare a statement of cash flows using the direct method. (Do not prepare a reconciliation schedule.)

"Order a similar paper and get 15% discount on your first order with us
Use the following coupon
"FIRST15"

Order Now