The comparative balance sheets of Mary McGuire Design Studio, Inc., at June 30, 2018, and 2017, and transaction data for fiscal 2018, are as follows:

Transaction data for the year ended June 30, 2018, follows:

a. Net income, $71,000

b. Depreciation expense on equipment, $14,000

c. Purchased a long-term investment with cash, $16,800

d. Sold land for $63,600, including a $7,000 loss

e. Acquired equipment by issuing a long-term note payable, $15,500

f. Paid off a long-term note payable, $58,600

g. Received cash for the issuance of common stock, $500

h. Paid cash dividends, $7,200

i. Paid off a short-term note payable by issuing common stock, $6,100

Requirements

1. Prepare the statement of cash flows of Mary McGuire Design Studio for the year ended June 30, 2018, using the indirect method to report operating activities. Also prepare the accompanying schedule of noncash investing and financing activities. All current account changes except for the short-term Notes Payable changes result from operating transactions.

2. Prepare a supplementary schedule showing cash flows from operations using the direct method. The accounting records provide the following: collections from customers, $260,000; interest received, $1,900; payments to suppliers, $158,600; payments to employees, $40,200; payments for income tax, $12,600; and payment of interest, $4,700.

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A1 Mary McGuire Design Studio, Inc. Comparative Balance Sheets June 30, 2018 2 Increase 2017 (Decrease) 3 4 Current assets: Cash 1,600 $ 27,300 52,000 60,500 2,100 92,800 73,300 5,200 $ 308,300 $ 287,500 $ 20,800 $ 28,900 $ 59,000 97,700 3,700 22,200 74,800 22,000 Accounts receivable Inventories Prepaid expenses 9 Land 10 Equipment, net 11 Long-term investment 12 13 Current liabilities: 14 6. 7,000 37,200 1,600 (70,600) 1,500 16,800 Notes payable, short-term 15 19,000 $ (6,100) 41,500 14,800 9,300 3,000 3,200 93,800 61,500 41,400 $ 308,300 $ 287,500 $ 20.800 12,900 $ 34,300 13,400 14,900 4,000 4,800 50,700 68,100 105,200 Accounts payable 16 (7,200) (1,400) 5,600 1,000 1,600 (43,100) 6,600 63,800 Income tax payable Accrued liabilities 18 17 Interest payable 19 Salary payable 20 Long-term note payable 21 Common stock 22 Retained earnings 23 24