Question

The following information is available for the Arthur Corporation:


ARTHUR CORPORATION Balance Sheets At December 31
2013 2012
Assets:
Cash $ 24,640 $ 23,040
Accounts receivable 32,180 29,400
Merchandise inventory 73,125 61,710
Long-term investments 55,900 56,400
Equipment 175,500 145,500
Accumulated depreciation (33,550) (31,200)
Total assets $327,795 $284,850
Liabilities:
Accounts payable $ 65,000 $40,380
Income taxes payable 10,725 10,200
Bonds payable 48,750 66,000
Total liabilities $124,475 $116,580
Equity:
Common stock 117,000 96,000
Contributed capital in excess of par 13,000 9,000
Retained earnings 73,320 63,270
Total equity $203,320 $168,270
Total liabilities and equity $327,795 $284,850

ARTHUR CORPORATION Income Statement For Year Ended December 31, 2013
Sales $240,000
Cost of goods sold $80,900
Depreciation expense 29,400
Other operating expenses 48,000
Interest expense 2,000 (160,300)
Other gains (losses):
Loss on sale of equipment (8,400)
Income before taxes 71,300
Income taxes expense (27,650)
Net income $ 43,650

Additional information:
(1) There was no gain or loss on the sales of the long-term investments, nor on the bonds retired.
(2) Old equipment with an original cost of $37,550 was sold for $2,100 cash.
(3) New equipment was purchased for $67,550 cash.

(4) Cash dividends of $33,600 were paid.
(5) Additional shares of stock were issued for cash.

Required: Prepare a complete statement of cash flows for the 2013 calendar year using the direct method.

Answer

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