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Problem 23-6_MARCUS INC_statement of cash flows




Question;Problem 23-6Comparative balance sheet accounts of Marcus Inc. are presented below.MARCUS INC.COMPARATIVE BALANCE SHEET ACCOUNTSAS OF DECEMBER 31, 2012 AND 2011December 31Debit Accounts20122011Cash$41,940$33,490Accounts Receivable70,33060,340Inventory29,85024,210Investments (available-for-sale)22,46038,200Machinery30,15019,150Buildings67,15056,070Land7,4407,440$269,320$238,900 Credit AccountsAllowance for Doubtful Accounts$2,850$1,130Accumulated Depreciation?Machinery6,2802,160Accumulated Depreciation?Buildings14,0108,730Accounts Payable35,65024,290Accrued Payables3,2402,817Long-Term Notes Payable20,77031,040Common Stock, no-par150,700124,300Retained Earnings35,82044,433$269,320$238,900Additional data (ignoring taxes):1.Net income for the year was $39,067.2.Cash dividends declared and paid during the year were $21,280.3.A 20% stock dividend was declared during the year. $26,400 of retained earnings was capitalized.4.Investments that cost $25,000 were sold during the year for $28,340.5.Machinery that cost $3,210, on which $727 of depreciation had accumulated, was sold for $1,662.Marcus?s 2012 income statement follows (ignoring taxes).Sales$537,688Less: cost of goods sold380,630Gross margin157,058Less: Operating expenses (includes $10,127 depreciation and $5,970 bad debts)120,510Income from operations36,548Other: Gain on sale of investments$3,340 Loss on sale of machinery(821)2,519Net income$39,067(a)Compute net cash flow from operating activities using the direct method.(b)Prepare a statement of cash flows using the indirect method.


Paper#37358 | Written in 18-Jul-2015

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