Problem E The following comparative balance sheets and other data are for Dayton Tent & Awning Sales, Inc.:

Dayton Tent & Awning Sales, Inc.

Comparative Balance Sheets 2011 June 30 and 2010 2011 2010 Assets Cash $ 441,800 $ 332,600 Accounts receivable, net 750,750 432,900 Merchandise inventory 819,000 850,200 Prepaid insurance 3,900 5,850 Land 312,000 351,000 Buildings 2,184,000 1,209,000 Machinery and tools 858,000 468,000 Accumulated depreciation – machinery and tools

(809,250) (510,900)

Total assets $

4,560,200

$

3,138,650 Liabilities and stockholders' equity Accounts payable $ 226,750 $ 275,500 Accrued liabilities payable 185,800 111,700 Bank loans (due in 2009) 56,550 66,300 Mortgage bonds payable 382,200 185,250 Common stock - $100 par 1,755,000 585,000 Paid-in capital in excess of par 58,500 -0-

Retained earnings 1,895,400 1,914,900 Total liabilities and stockholders' equity $

4,560,200

$

3,138,650 Net income for the year was USD 128,000.

Depreciation for the year was USD 356,850.

There was a gain of USD 7,800 on the sale of land. The land was sold for USD 46,800.

The additional mortgage bonds were issued at face value as partial payment for a building valued at USD 975,000. The amount of cash paid was USD 778,050.
Machinery and tools were purchased for USD 448,500 cash.
Fully depreciated machinery with a cost of USD 58,500 was scrapped and written off.
Additional common stock was issued at USD 105 per share. The total proceeds were USD 1,228,500.
Dividends declared and paid were USD 147,500.
A payment was made on the bank loan, USD 9,750.
The company paid interest of USD 9,000 and income taxes of USD 75,000.

a. Prepare a working paper for a statement of cash flows.

b. Prepare a statement of cash flows under the indirect method. Also prepare any necessary supplemental schedule(s).