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on key board), It will show all calculations and formulas Automatically Please Give Me the Feed Back About My Solution Question: 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

yes yes yes

13000 93000-80000 on this sold of gain yes yes 15000 9000 issued for plant rest issued

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 Solution:- Computation of the Cash flow using indirect method FANCY FOOTWORK COMPANY STATEMENT OF CASH FLOW AS OF December 31 InDirect Method

Particulars CASHFLOW FROM OPERATING ACTIVITIES Net Income Depreciation on Assets Gain on sale of investments Increase in Account Receivable Decrease in Marchandise Inventory Increase in Account Payable Decrease in Accruedt Payable Net Cash Flow from Operating Activities CASHFLOW FROM INVESTING ACTIVITIES Sale of Investments Purchase of Assets Net Cash Flow from Investing Activities CASHFLOW FROM FINANCING ACTIVITIES Dividends Paid Issue of Common Stock Repaid Bond payable Net Cash Flow from Financing Activities Net Cash Flows Add Opening Cash Balance Closing Cash Balance

Amounts $ $ $ $ $ $ $ $ 72,600 4,000 (7,000) (36,000) 40,000 13,000 (3,100) 83,500

80000-76000 120000-156000 220000-180000 135000-122000 30000-33100

$ $ $

20,000 93000-80000 on this sold of gain (16,000) 160000-135000-9000 asset purc 4,000

$ $ $ $ $ $ $

(32,500) 6,000 180000-165000-9000 (31,000) 135000-166000 (57,500) 30,000 230,000 260,000

B) Prepare a statement of cash flows using the direct method. (Do not prepare a reconciliation schedule.) Solution:- Computation of the Cash flow using Direct method FANCY FOOTWORK COMPANY STATEMENT OF CASH FLOW AS OF December 31 Direct Method Particulars Amount CASHFLOW FROM OPERATING ACTIVITIES Cash Received from customers $ 714,000 750000-36000 Cash Paid to Suppliers $ (477,000) 530000-40000-13000 Operating Expenses $ (105,100) (106000+3100-4000) Income Tax paid $ (48,400) as given in the problem Net Cash Flow from Operating Activities $ 83,500 CASHFLOW FROM INVESTING ACTIVITIES Sale of Investments Purchase of Assets Net Cash Flow from Investing Activities CASHFLOW FROM FINANCING ACTIVITIES Dividends Paid

$ $ $

20,000 (16,000) 4,000

(32,500)

Issue of Common Stock Repaid Bond payable Net Cash Flow from Financing Activities Net Cash Flows Add Opening Cash Balance Closing Cash Balance
k t ( P t P t P t

$ $ $ $ $ $
1 1

6,000 (31,000) (57,500) 30,000 230,000 260,000

C t )

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on Key on key board),

0-80000 on this sold of gain 7000 sol selling price is 20000 cost is 13000 + 7000 gain

issued for plant rest issued for cash 6000

00-156000 00-180000 00-122000

0-80000 on this sold of gain 7000 sol selling price is 20000 cost is 13000 + 7000 gain 00-135000-9000 asset purchased 25000 on that issued shares 9000 rest cash 16000

00-165000-9000 00-166000

Sales - Increase in A/R 00-40000-13000 COGS-Increase in inventory - Increase in A/P 000+3100-4000) Operating expesens+accured exp-Depreciation en in the problem