1. The comparative balance sheet of Fox Company, for the current year and the preceding year ended December 31, appears below in condensed form:
|
Current
Year
|
Preceding
Year
|
Cash
|
$ 45,000
|
$ 53,500
|
Accounts receivable (net)
|
51,300
|
58,000
|
Inventories
|
147,200
|
135,000
|
Investments
|
0
|
60,000
|
Equipment
|
493,000
|
375,000
|
Accumulated depreciation-equipment
|
(113,700)
|
(128,000)
|
|
$622,800
|
$553,500
|
|
========
|
========
|
Accounts payable
|
$ 61,500
|
$ 42,600
|
Bonds payable, due 2008
|
|
100,000
|
Common stock, $10 par
|
250,000
|
200,000
|
Paid-in capital in excess of par–common stock
|
75,000
|
50,000
|
Retained earnings
|
236,300
|
160,900
|
|
$622,800
|
$553,500
|
|
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|
========
|
The income statement for the current year is as follows:
Sales
|
|
$623,000
|
Cost of merchandise sold
|
|
348,500
|
Gross profit
|
|
$274,500
|
Operating expenses:
|
|
|
Depreciation expense
|
$24,700
|
|
Other operating expenses
|
75,300
|
100,000
|
Income from operations
|
|
$174,500
|
Other income:
|
|
|
Gain on sale of investment
|
$ 5,000
|
|
Other expense:
|
|
|
Interest expense
|
12,000
|
(7,000)
|
Income before income tax
|
|
$167,500
|
Income tax
|
|
64,100
|
Net income
|
|
$103,400
|
|
|
========
|
Additional data for the current year are as follows:
(a)
|
Fully depreciated equipment costing $39,000 was scrapped, no salvage, and equipment was purchased for $157,000.
|
(b)
|
Bonds payable for $100,000 were retired by payment at their face amount.
|
(c)
|
5,000 shares of common stock were issued at 15 for cash.
|
(d)
|
Cash dividends declared and paid.
|
(e)
|
All sales are on account.
|
Prepare a statement of cash flows, using the direct method of reporting cash flows from operating activities.