Presented below is the comparative balance sheet for Spicer Inc., a private company reporting under ASPE, at December 31, 2024 and 2023:

Additional information: 

1. Cash dividends of $15,000 were declared. 

2. A long-term investment was acquired for cash at a cost of $101,500. 

3. Depreciation expense is included in the operating expenses. 

4. The company issued 10,500 common shares for cash on March 2, 2024. The fair value of the shares was $10 per share. The proceeds were used to purchase additional equipment. 

5. Equipment that originally cost $30,000 was sold during the year for cash. The equipment had a carrying value of $9,000 at the time of sale. 

6. The company issued a note payable for $28,000 and repaid $3,000 by year end. 

7. All purchases of inventory are on credit. 

8. Accounts payable is used only to record purchases of inventory. 

Instructions 

a. Prepare a cash flow statement for the year using the indirect method. 

b. Prepare a cash flow statement for the year using the direct method.  

Is it necessary to show both the proceeds from issuing a new note payable and the partial repayment of notes payable? Or is it sufficient to simply show the net increase or decrease in notes payable, as is done with accounts payable? Explain.

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Assets Cash Accounts receivable Inventory Long-term investment Property, plant, and equipment Accumulated depreciation Total assets. Liabilities and Shareholders' Equity Accounts payable Dividends payable Income tax payable Long-term notes payable Common shares SPICER INC. Balance Sheet December 31 Retained earnings Total liabilities and shareholders' equity 2024 $ 67,000 101,000 205,000 101,500 535,000 (162,500) $847,000 $ 57,500 6,000 14,000 25,000 630,000 114,500 $847,000 2023 $ 98,000 75,000 155,500 0 460,000 (140,000) $648,500 $ 47,000 0 15,000 0 525,000 61,500 $648,500