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.

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?

Transcribed Image Text:

Rosie-Lee Company Comparative Balance Sheets At June 30, 2013 and 2014 In vestments Plant and equipment Liabilities and equity Accounts payable Total liabilities and equity Income Statement For the Year Ended June 30, 2014 920,000 Less Cost of goods sold 300,000 Less Operating expenses