Problem - Condensed financial data of Fairchild company for 2012 and 2011 are presented below:
Cash: 2012 = 1800, 2011 = 1100. Receivables: 2012 = 1750, 2011 = 1300. inventory: 2012 = 1600, 2011 = 1900. plant assets: 2012 = 1900, 2011 = 1700. accumulated depreciation: 2012 = (1200), 2011 = 1170. long-term investments (held to maturity): 2012 = 1300, 2011 = 1470. accounts payable: 2012 = 1200, 2011 = 800. accrued liablities: 2012 = 200, 2011 = 250. bonds payable: 2012 = 1400, 2011 = 1650. common stock: 2012 = 1900, 2011 = 1700. retained earnings: 2012 = 2450, 2011 = 1900.;
Income statement for the year ended December 31, 2012 is as follows:
Sales = 6900.
cost of goods sold = 4700.
gross margin = 2200.
selling and administrative expenses = 930.
income from operations = 1270.
Other revenue and gains:
Gain on sale of investment = 80.
income before tax = 1350.
income tax expense = 540.
net income = 810.
Additional info:
During the year, $70 of common stock was issue in exchange for plant assets. No plant assets were sold in 2012. Cash dividends were $260.
Instructions:
(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 statement).