The comparative balance sheet of Rowe Products Inc. for December 31, 2013 and 2012, is as follows:
|
Dec. 31, 2013 |
Dec. 31, 2012 |
|
|
Assets |
||
|
Cash |
$ 772,080 |
$ 815,280 |
|
Accounts receivable (net) |
680,160 |
656,880 |
|
Inventories |
1,213,200 |
1,179,360 |
|
Investments |
0 |
288,000 |
|
Land |
624,000 |
0 |
|
Equipment |
1,056,000 |
816,000 |
|
Accumulated depreciation |
(293,280) |
(240,480) |
|
$4,052,160 |
$3,515,040 |
|
|
Liabilities and Stockholders’ Equity |
||
|
Accounts payable (merchandise creditors) |
$ 926,160 |
$ 898,080 |
|
Accrued expenses payable (operating expenses) |
76,080 |
84,960 |
|
Dividends payable |
10,560 |
7,680 |
|
Common stock, $10 par |
177,600 |
38,400 |
|
Paid-in capital in excess of par—common stock |
369,600 |
230,400 |
|
Retained earnings |
2,492,160 |
2,255,520 |
|
$4,052,160 |
$3,515,040 |
The income statement for the year ended December 31, 2012, is as follows:
|
Sales |
$7,176,000 |
|
|
Cost of merchandise sold |
2,942,400 |
|
|
Gross profit |
$4,233,600 |
|
|
Operating expenses: |
||
|
Depreciation expense |
$ 52,800 |
|
|
Other operating expenses |
3,720,000 |
|
|
Total operating expenses |
3,772,800 |
|
|
Operating income |
$ 460,800 |
|
|
Other expense: |
||
|
Loss on sale of investments |
(76,800) |
|
|
Income before income tax |
$ 384,000 |
|
|
Income tax expense |
123,360 |
|
|
Net income |
$ 260,640 |
The following additional information was taken from the records:
a. Equipment and land were acquired for cash.
b. There were no disposals of equipment during the year.
c. The investments were sold for $211,200 cash.
d. The common stock was issued for cash.
e. There was a $24,000 debit to Retained Earnings for cash dividends declared.
Instruction
Prepare a statement of cash flows, using the direct method of presenting cash flows from operating activities.
