The comparative balance sheet of House Construction Co. for June 30, 2010 and 2009, is as follows:
ASSETS JUNE 30,2010 30-Jun-09
CASH……….$41,600 $28,200
A/R (NET)……..$121,900 $110,700
INVENTORIES…….$175,600 $170,500
INVESTMENTS…………$0 $60,000
LAND……….$174,000 $0
EQUIPTMENT…….$258,000 $210,600
ACCUMULATED DEPRECIATION………($58,300) ($49,600)
TOTAL……….$712,800 $530,400
LIABILITES & STOCKHOLDERS EQUITY
A/P (MERCHANDISE CREDITORS)………$121,000 $114,200
ACCRUED EXPENSE PAYABLE (OPERATING EXPENSE)……$18,000 $15,800
DIVIDENDS PAYABLE…………$15,000 $12,000
COMMON STOCK, $1 PAR……….$67,200 $60,000
PAID-IN CAPITAL IN EXCESS OF PAR – COMMON STOCK…….$264,000 $120,000
RETIANED EARNINGS……$227,600 $208,400
TOTAL……..$712,800 $530,400
The income Statement for the year ended June 30, 2010 is as follows:
SALE……….$1,134,900
COST OF MERCHANDISE SOLD…….$698,400
GROSS PROFIT………$436,500
OPERATING EXPENSES:
DEPRECIATION EXPENSE……$8,700
OTHER OPERATING EXPENSES….$289,800
TOTAL OPERATING EXPENSES…….$298,500
OPERATING INCOME………$138,000
OTHER EXPENSES:
LOSS ON SALE OF INVESTMENTS……($6,000)
INCOME BEFORE INCOME TAX…….$132,000
INCOME TAX EXPENSE………$52,800
NET INCOME…………$79,200
The following additional information was taken from the records:
A. Equipment and land were acquired for cash.
B. There were no disposals of equipment during the year.
C. The investments were sold for $54,000 cash.
D. The common stock was issued for cash.
E. There was a $60,000 debit to Retained Earnings for cash dividends declared.
Instructions: Prepare a statement of cash flows, using the direct method of presenting cash flows from operating activities
