Solve the below problem:
Q: Andrews Inc., a greeting card company, had the following statements prepared as of December 31, 2012.
ANDREWS INC.
COMPARATIVE BALANCE SHEET
AS OF DECEMBER 31, 2012 AND 2011 |
|
|
12/31/12 |
|
12/31/11 |
| Cash |
|
$5,890 |
|
|
$8,992 |
|
| Accounts receivable |
|
62,200 |
|
|
49,131 |
|
| Short-term investments (available-for-sale) |
|
34,888 |
|
|
18,110 |
|
| Inventory |
|
39,922 |
|
|
60,138 |
|
| Prepaid rent |
|
4,991 |
|
|
4,047 |
|
| Equipment |
|
153,710 |
|
|
128,060 |
|
| Accumulated depr."equipment |
|
(34,823 |
) |
|
(25,013 |
) |
| Copyrights |
|
46,037 |
|
|
49,864 |
|
| Total assets |
|
$312,815 |
|
|
$293,329 |
|
|
|
|
|
|
|
|
| Accounts payable |
|
$45,929 |
|
|
$42,103 |
|
| Income taxes payable |
|
4,149 |
|
|
5,970 |
|
| Salaries and wages payable |
|
7,871 |
|
|
3,817 |
|
| Short-term loans payable |
|
7,962 |
|
|
9,818 |
|
| Long-term loans payable |
|
60,143 |
|
|
67,132 |
|
| Common stock, $10 par |
|
104,300 |
|
|
104,300 |
|
| Contributed capital, common stock |
|
28,790 |
|
|
28,790 |
|
| Retained earnings |
|
53,671 |
|
|
31,399 |
|
| Total liabilities & stockholders' equity |
|
$312,815 |
|
|
$293,329 |
|
ANDREWS INC.
INCOME STATEMENT
FOR THE YEAR ENDING DECEMBER 31, 2012 |
| Sales |
|
|
|
$339,167 |
| Cost of goods sold |
|
|
|
175,290 |
| Gross margin |
|
|
|
163,877 |
| Operating expenses |
|
|
|
119,690 |
| Operating income |
|
|
|
44,187 |
| Interest expense |
|
$11,436 |
|
|
| Gain on sale of equipment |
|
2,094 |
|
9,342 |
| Income before tax |
|
|
|
34,845 |
| Income tax expense |
|
|
|
6,792 |
| Net income |
|
|
|
$28,053 |
Prepare a statement of cash flows using the direct method.