Comparative balance sheet accounts of Marcus Inc. are presented below.
COMPARATIVE BALANCE SHEET ACCOUNTS
AS OF DECEMBER 31, 2014 AND 2013
|Allowance for Doubtful Accounts||$2,150||$1,480|
|Long-Term Notes Payable||21,480||30,900|
|Common Stock, no-par||150,600||125,400|
Additional data (ignoring taxes):
|1.||Net income for the year was $40,629.|
|2.||Cash dividends declared and paid during the year were $20,880.|
|3.||A 20% stock dividend was declared during the year. $25,200 of retained earnings was capitalized.|
|4.||Investments that cost $25,280 were sold during the year for $28,320.|
Machinery that cost $3,220, on which $788 of depreciation had accumulated, was sold for $1,624.
Marcus’s 2014 income statement follows (ignoring taxes).
|Less: Cost of goods sold||380,450|
|Less: Operating expenses (includes $9,808 depreciation and $5,970 bad debts)||120,470|
|Income from operations||38,397|
|Other: Gain on sale of investments||$3,040|
|Loss on sale of machinery||(808||)||2,232|
(a) Compute net cash flow from operating activities using the direct method. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)
|Net cash flow from operating activities||$|
(b) Prepare a statement of cash flows using the indirect method. (Show amounts that decrease cash flow with either a – sign e.g. -15,000 or in parenthesis e.g. (15,000).)