Problem:
Financial data of Fancy Footwork Company for 2013 and 2012 are presented below.
FANCY FOOTWORK COMPANY
COMPARATIVE BALANCE SHEET
AS OF DECEMBER 31, 2013 AND 2012
|
|
2013
|
2012
|
|
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, 2013
|
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 2012. Cash dividends were $32500.
Required: Use Excel
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.)