P11-76B. (Learning Objectives 3, 4, 5, 6: Preparing the statement of cash flows—direct and indirect methods) To prepare the statement of cash flows, accountants for Spencer Electric Company have summarized the 20X6 activity in two accounts as follows:

Spencer’s 20X6 Income Statement and Balance Sheet data follow:

Requirements
1. Prepare the statement of cash flows of Spencer Electric Company for the year ended December 31, 20X6, using the direct method to report operating activities. Also prepare the accompanying schedule of noncash investing and financing activities.
2. Use Spencer’s 20X6 Income Statement and Balance Sheet to prepare a supplementary schedule of cash flows from operating activities by using the indirect method.

Cash Beginning balance 71,500 Payments on accounts payable 399,500 Sale of long-term investment Collections from customers 20,000 Payments of dividends 27,600 661,600 Payments of salaries and wages 143,300 Issuance of shares Receipts of dividends 22,200 Payments of interest 27,100 16,800 Purchase of equipment 31,700 Payments of operating expenses 34,900 Payment of long-term note payable 41,300 Purchase of treasury shares 26,300 Payment of income tax 18,600 Ending Balance 41,800 Share capital Beginning balance 73,200 Issuance for cash 22,200 Issuance to acquire land 61,700 Issuance to retire note payable 17,000 Ending balance 174,100