From the financial statements and added information provided in Problem 16C-1 for the Empire Company Ltd., prepare a statement of cash flows using the direct method.

In Problem 16C-1

From the following income statement, balance sheet, and added information for Empire Company Ltd., prepare a statement of cash flows using the indirect method.

Empire Company Ltd.

Income Statement

For the Year Ended May 31, 2015

Empire Company Ltd.
Balance Sheet
As of May 31, 2015 and 2014

Additional Data:
1. All fixed asset additions were paid by cheque.
2. A dividend of $12,000 was paid in cash during the year.
3. Additional preferred and common shares were sold for cash.
4. There were no disposals of capital assets during the year.
5. The company defines cash as including Temporary Investments

Sales Cost of Goods Sold Gross Profit $512,520 290,140 222,380 Expenses: Advertising Amortization Insurance Interest Miscellaneous Rent Salaries $21,480 23,910 17,638 5,030 18,400 36,000 63,402 Total Expenses 185,860 36,520 Net Income 2014 Assets Current Assets: 2015 Cash Temporary Investments Accounts Receivable Net Merchandise Inventory Prepaid Insurance Prepaid Rent 10,580 50,000 69,930 84,550 8,405 12,000 235,465 $ 8,670 30,000 58,465 61,894 7,815 12,000 Total Current Assets 178,844 Plant and Equipment: Automotive Computers and Related Store Equipment Less: Accum. Amort. Less: Accum. Amort. Less: Accum. Amort. $88,600 42,880 146,540 $72,480 37,340 138,620 39,400 49,200 32,400 40,080 26,200 16,680 17,400 19,940 62,490 84,050 149,930 $385,395 54,380 84,240 144,260 $323,104 Plant and Equipment-total Total Assets Liabilities and Shareholders' Equity Current Liabilities: 22,000 86,386 2,814 10,250 121,450 Bank Loan Payable 19,400 78,675 3,465 11,840 113,380 Accounts Payable Accrued Salaries Current Portion of Auto Loan Payable Total Current Liabilities Long-Term Liability Automotive Loan-Long-Term Portion 27,425 148,875 32,724 146,104 Total Liabilities Shareholders' Equity Preferred Shares-$6.00 Nonparticipating Common Shares Retained Earnings 120,000 20,000 96,520 236,520 $385,395 90,000 15,000 72,000 177,000 $323,104 Total Shareholders' Equity Total Liabilities and Shareholders' Equity