Refer to the information reported about Gazelle Corporation in Problem 16-3B.

In Prob 16-3B

Gazelle Corporation’s current-year income statement, comparative balance sheets, and additional information follow. For the year, (1) all sales are credit sales, (2) all credits to Accounts Receivable reflect cash receipts from customers, (3) all purchases of inventory are on credit, and (4) all debits to Accounts Payable reflect cash payments for inventory.

Required

Prepare a complete statement of cash flows using a spreadsheet as in Exhibit 16A.1 using the indirect method. Identify the debits and credits in the Analysis of Changes columns with letters that correspond to the following list of transactions and events.

a. Net income was $158,100.

b. Accounts receivable decreased.

c. Inventory decreased.

d. Prepaid expenses decreased.

e. Accounts payable decreased.

f. Depreciation expense was $38,600.

g. Sold equipment costing $51,000, with accumulated depreciation of $22,850, for $26,050 cash. This yielded a loss of $2,100.

h. Purchased equipment costing $113,250 by paying $43,250 cash

(i.) by signing a long-term notes payable for the balance.

j. Paid $42,500 cash to reduce the long-term notes payable.

k. Issued 3,000 shares of common stock for $15 cash per share.

l. Declared and paid cash dividends of $53,600.

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At December 31 Assets Cash.. Accounts receivable Inventory.. Prepaid expenses. Total current assets. Equipment..... GAZELLE CORPORATION Comparative Balance Sheets Accum. depreciation Equipment Total assets Liabilities and Equity Accounts payable.... Long-term notes payable Total liabilities.. Equity Common stock, $5 par Paid-in capital in excess of par, common stock.. Retained earnings.... Total liabilities and equity. Current Year Prior Year $123,450 77,100 240,600 250,700 15,100 17,000 456,250 410,000 262,250 200,000 (110,750) $607,750 $ 17,750 115,000 132,750 $ 61,550 80,750 215,000 30,000 230,000 $607,750 (95,000) $515,000 $102,000 87,500 189,500 200,000 125,500 $515,000 GAZELLE CORPORATION Income Statement For Current Year Ended December 31 Sales Cost of goods sold Gross profit... Operating expenses (excluding depreciation) Depreciation expense Other gains (losses) Loss on sale of equipment.. Income before taxes.. Income taxes expense Net income. $1,185,000 595,000 590,000 362,850 38,600 188,550 (2,100) 186,450 28,350 $ 158,100 Additional Information on Current-Year Transactions a. The loss on the cash sale of equipment was $2,100 (details in b). b. Sold equipment costing $51,000, with accumulated depreciation of $22,850, for $26,050 cash. c. Purchased equipment costing $113,250 by paying $43,250 cash and signing a long-term notes payable for the balance. d. Paid $42,500 cash to reduce the long-term notes payable. e. Issued 3,000 shares of common stock for $15 cash per share. f. Declared and paid cash dividends of $53,600.