ACCT 557 WEEK 6 HOMEWORK

ACCT 557 WEEK 6 Problems
Financial data of Fancy Footwork Company for 2013 and 2012 are presented below.
			
FANCY FOOTWORK COMPANY	
COMPARATIVE BALANCE SHEET	
AS OF DECEMBER 31, 2013 AND 2012	
 		 	
 	2013	2012	
Cash	 $       260,000 	 $       230,000 	
Receivables	 $       156,000 	 $       120,000 	
Inventory	 $       180,000 	 $       220,000 	
Plant assets	 $       160,000 	 $       135,000 	
Accumulated depreciation	 $       (80,000)	 $       (76,000)	
Long-term investments (held-to-maturity)	 $         80,000 	 $         93,000 	
 	 $       756,000 	 $       722,000 	
 		 	
Accounts payable	 $       135,000 	 $       122,000 	
Accrued liabilities	 $         30,000 	 $         33,100 	
Bonds payable	 $       135,000 	 $       166,000 	
Common stock	 $       180,000 	 $       165,000 	
Retained earnings	 $       276,000 	 $       235,900 	
 	 $       756,000 	 $       722,000 	
 	 	 	
			
FANCY FOOTWORK COMPANY	
INCOME STATEMENT	
For the year ended Dec 31, 2013	
Sales		750000	
Cost of Goods Sold		530000	
Gross Margin		220000	
Selling and administrative expenses		106000	
Income from Operations		114000	
Other revenues and gains		 	
    Gain on sale of investments		7000	
Income before tax		121000	
Income tax expense		48400	
Net Income		72600	
 	 	 	
			
Additional 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 method.	
B) Prepare a statement of cash flows using the direct method. (Do not prepare a reconciliation schedule.)