carmel company s comparative balance sheet and income statement for last year appear 641415

Carmel Company”s comparative balance sheet and income statement for last year appear below:

Statement of Financial Position

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Ending

Beginning

 

Balance

Balance

Cash

$ 49,000

$ 30,000

Accounts receivable

23,000

30,000

Inventory

63,000

49,000

Prepaid expenses

13,000

19,000

Long term investments

260,000

200,000

Plant and equipment

520,000

500,000

Accumulated depreciation

(256,000)

(224,000)

Total assets

$672,000

$604,000

Accounts payable

$ 20,000

$ 35,000

Accrued liabilities

30,000

17,000

Taxes payable

15,000

11,000

Bonds payable

100,000

150,000

Deferred taxes

23,000

16,000

Common stock

100,000

70,000

Retained earnings

384,000

305,000

Total liabilities and owners’ equity

$672,000

$604,000

 

Income Statement

 

Sales

$810,000

Less cost of goods sold

390,000

Gross margin

420,000

Less operating expenses

290,000

Net operating income

130,000

Less income taxes

39,000

Net income

$ 91,000

The company declared and paid $12,000 in cash dividends during the year.

Required:

Construct in good form the operating activities section of the company”s statement of cash flows for the year using the direct method.

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