Question

Comparative statement of financial position accounts of Marcus Inc. are presented below.


Additional data (ignoring taxes):
1. Net income for the year was $42,500.
2. Cash dividends declared and paid during the year were $21,125.
3. A 20% share dividend was declared during the year. $25,000 of retained earnings was capitalized.
4. Equity investments that cost $25,000 were sold during the year for $28,750.
5. Machinery that cost $3,750, on which $750 of depreciation had accumulated, was sold for $2,200.
Marcus’s 2010 income statement follows (ignoring taxes).


Instructions
(a) Compute net cash flow from operating activities using the direct method.
(b) Prepare a statement of cash flows using the indirectmethod.


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  • CreatedJune 17, 2013
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