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ACCT557 - Week 6 HW Questions

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Question;Problems:Financial data of Fancy Footwork Company for 2013 and 2012 are presented below.FANCY FOOTWORK COMPANYCOMPARATIVE BALANCE SHEETAS OF DECEMBER 31, 2013 AND 20122013 2012Cash $ 260,000 $ 230,000Receivables $ 156,000 $ 120,000Inventory $ 180,000 $ 220,000Plant assets $ 160,000 $ 135,000Accumulated depreciation $ (80,000) $ (76,000)Long-term investments (held-to-maturity) $ 80,000 $ 93,000$ 756,000 $ 722,000Accounts payable $ 135,000 $ 122,000Accrued liabilities $ 30,000 $ 33,100Bonds payable $ 135,000 $ 166,000Common stock $ 180,000 $ 165,000Retained earnings $ 276,000 $ 235,900$ 756,000 $ 722,000FANCY FOOTWORK COMPANYINCOME STATEMENTFor the year ended Dec 31, 2013Sales 750000Cost of Goods Sold 530000Gross Margin 220000Selling and administrative expenses 106000Income from Operations 114000Other revenues and gainsGain on sale of investments 7000Income before tax 121000Income tax expense 48400Net Income 72600Additional 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:A) Prepare a statement of cash flows using the indirect methodB) Prepare a statement of cash flows using the direct method. (Do not prepare a reconciliation schedule.)

 

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