Refer to the information for Rosie-Lee Company below. Additional transactions were as follows: a. Sold equipment costing

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Refer to the information for Rosie-Lee Company below. Additional transactions were as follows:

a. Sold equipment costing $21,600 with accumulated depreciation of $16,200 for $3,600.

b. Issued bonds for $90,000 on December 31.

c. Paid cash dividends of $36,000.

d. Retired mortgage of $108,000 on December 31.

The following balance sheets and income statement were taken from the records of Rosie-Lee Company:

Refer to the information for Rosie-Lee Company below. Additional transactions

Rosie-Lee Company
Income Statement
For the Year Ended June 30, 2016
Sales..............................................................$ 920,000
Less: Cost of goods sold...............................(620,000)
Gross margin................................................$ 300,000
Less: Operating expenses.............................(177,600)
Net income....................................................$ 122,400


Required:
1. Prepare a schedule of operating cash flows using (a) the indirect method and (b) the direct method.
2. Prepare a statement of cash flows using the indirect method.

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Cornerstones of Managerial Accounting

ISBN: 978-1305103962

6th edition

Authors: Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

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