other data are for Dayton on Tent Awning Problem 16 and sta

other data are for Dayton on Tent & Awning Problem 16 and statement of c e following comparative balance sheets and Th DAYTON TENT & AWNING SALES, INC. Comparative Balance Sheets June 30, 2013 and 2012 Sales, Inc.: flows under the indi method (Appen (LC 2013 2012 Assets Cash Accounts receivable, net Merchandise inventory Prepaid insurance Land Buildings Machinery and tools Accumulated depreciation-machinery and tools Total assets 441,800 332,600 432,900 850,200 5,850 351,000 2,184,000 1,209,000 468,000 750,750 819,000 3,900 312,000 858,000 (809,250) (510,900) $ 4,560,200 $3,138,650 Liabilities and Stockholders\' Equity s 226,750$ 275,500 111,700 56,550185,250 Accounts payable Accrued liabilities payable Bank loans (due in 2016) Mortgage bonds payable Common stock-$100 par Paid-in capital in excess of par Retained earnings Total liabilities and stockholders\' equity 185,800 66,300 382,200 1,755,000 58,500 585,000 1,895,400 1,914,900 $4,560,200 3,138,650 Addition 1. Net income for the year was $128,000. 2. Depreciation for the year was $356,850. 3. There was a gain of $7,800 on the sale of land. The land was sold for $46,800. 4. The aditional mortgage bonds were issued at face value as partial payment for a building valued at $975,000. The amount of cash paid was $778,050. 5. Machinery and tools were purchased for $448,500 cash. . Fully depreciated machinery with a cost of $58,500 was scrapped and written off. Adfitional common stock was issued at $105 per share. The total proceeds were $1,228,500 8. Dividends declared and paid were $147,500. 9. A payment was made on the bank loan, s9,750. 10. The company paid interest of $9,000 and income taxes of $75,000. Requir a. Prepare a working paper for a statement of cash flows. b. Frepare a statement of cash flows under the indirect method. Also prepare any necessary supplemental schedule(s)

Solution

Part A - Worksheet Account Account Balance Balance 6-30-12 Debit Credit 6-30-13 Cash 332600 109200 441800 A/R 432900 317850 750750 Merchandise Inventory 850200 31000 819200 Prepaid Insurance 5850 1950 3900 Land 351000 39000 312000 Buildings 1209000 975000 2184000 Machinery and Tools 468000 390000 858000 Total 3649550 1792050 71950 5369650 Accumulated Depreciation 510900 298350 809250 A/P 275500 48750 226750 Accrued Liabilities 111700 74100 185800 Bank Loans 66300 9750 56550 Mortgage Bonds 185250 196950 382200 Common Stock 585000 1170000 1755000 PICEPS 0 58500 58500 Retained Earnings 1914900 19500 1895400 Total 3649550 78000 1797900 5369450 DAYTON TENT AND AWNING SALES INC Statement of cash flow for the year ended June 30, 2013 Cash flow from operations: Net income 128000 Adjustments for non cash items: Depreciation expense 356850 Gain on sale of land -7800 Interest expense 9000 358050 Adjustments for working capital changes Accounts receivable -317850 Inventory 31200 Prepaid Insurance 1950 Accounts Payable -48750 Accrued Liabilities 74100 -259350 Cash flow from operations 226700 Cash flow from investing activities: Sale of land 46800 Purchase of land -778050 Purchase of machinery and tools -448500 Cash flow from investing activity -1179750 Cash flow from Financing activity Issue of common stock 1228500 Dividend paid -147500 Repayment of bank loan -9750 Interest paid -9000 Cash Flow from financing activity 1062250 Net cash flow 109200 Beginning cash balance 332600 Ending cash balance 441800