Statement of cash flows (indirect method and direct method). The net changes in the balance sheet accounts of Keating Corporation for the year 2013 are shown below.
Account Debit Credit
Cash $82,000
Accounts receivable 83,200
Allowance for doubtful accounts 13,300
Inventory 74,200
Prepaid expenses 22,800
Accumulated depreciation 130,000
Accounts payable 80,700
Income tax payable 21,500
Other information - increase in retained earnings was $130,000 for the year; there was $155,300 of purchases of property plant and equipment and the company issued $85,000 of common stock during the year.
The summary income statement data for 2013 is presented below:
Sales Revenue $1,000,000
Operating expense 670,000 (includes cost of goods sold)
Depreciation expense 130,000
Pre-tax income 200,000
Income tax expense 70,000
Net income 130,000
Instructions:
Prepare the operating section of the statement of cash flows under the indirect method and the direct method.