Statement of Cash Flow
The statement of comprehensive income and statement of financial position of WTY Products Company are as follows:
Additional Information:
a. The company issued shares for land during the period, and issued shares valued at $57,000 in a stock dividend; other ordinary shares were retired at book value.
b. Long-term debt with a face value of $500,000 was repaid during the year and other long-term debt was issued at a lower interest rate.
c. The company sold equipment that had an original cost of $76,000. Other equipment was purchased for cash. Patent amortization was $3,000.
d. Assume unexplained changes in accounts stem from logical transactions.
Required:
1. Prepare the statement of cash flow, using the indirect method. Use the two-step method for operations. Classify interest paid in the operating activities, and include separate disclosure for cash paid for interest in the operating activities section. Dividends paid are classified in the financing section.
2. Prepare the statement of cash flow, using the direct method to disclose the cash flows in the operating activities section. Classify interest paid in the financing activities section.