Statement of cash flows using direct method - andrews inc.

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Reference no: EM13522095

Andrews Inc., a greeting card company, had the following statements prepared as of December 31, 2012.

ANDREWS INC.
COMPARATIVE BALANCE SHEET
AS OF DECEMBER 31, 2012 AND 2011


12/31/12
12/31/11
Cash
$5,890

$8,992
Accounts receivable
62,200

49,131
Short-term investments (available-for-sale)
34,888

18,110
Inventory
39,922

60,138
Prepaid rent
4,991

4,047
Equipment
153,710

128,060
Accumulated depr."equipment
(34,823 )
(25,013 )
Copyrights
46,037

49,864
Total assets
$312,815

$293,329







Accounts payable
$45,929

$42,103
Income taxes payable
4,149

5,970
Salaries and wages payable
7,871

3,817
Short-term loans payable
7,962

9,818
Long-term loans payable
60,143

67,132
Common stock, $10 par
104,300

104,300
Contributed capital, common stock
28,790

28,790
Retained earnings
53,671

31,399
Total liabilities & stockholders' equity
$312,815

$293,329
ANDREWS INC.
INCOME STATEMENT
FOR THE YEAR ENDING DECEMBER 31, 2012
Sales


$339,167
Cost of goods sold


175,290
Gross margin


163,877
Operating expenses


119,690
Operating income


44,187
Interest expense
$11,436

Gain on sale of equipment
2,094
9,342
Income before tax


34,845
Income tax expense


6,792
Net income


$28,053

1. Dividends in the amount of $5,781 were declared and paid during 2012.

2. Depreciation expense and amortization expense are included in operating expenses.

3. No unrealized gains or losses have occurred on the investments during the year.

4. Equipment that had a cost of $31,120 and was 70% depreciated was sold during 2012.

Prepare a statement of cash flows using the direct method.

Reference no: EM13522095

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