Comparative balance sheet accounts of Marcus Inc. are presented below.
| MARCUS INC. COMPARATIVE BALANCE SHEET ACCOUNTS AS OF DECEMBER 31, 2014 AND 2013 |
||||
| December 31 | ||||
| Debit Accounts | 2014 | 2013 | ||
| Cash | $42,050 | $34,060 | ||
| Accounts Receivable | 70,470 | 59,520 | ||
| Inventory | 29,440 | 24,030 | ||
| Investments (available-for-sale) | 22,300 | 38,440 | ||
| Machinery | 30,120 | 18,400 | ||
| Buildings | 67,850 | 55,860 | ||
| Land | 7,500 | 7,500 | ||
| $269,730 | $237,810 | |||
| Credit Accounts | ||||
| Allowance for Doubtful Accounts | $2,150 | $1,480 | ||
| Accumulated Depreciation—Machinery | 6,460 | 2,010 | ||
| Accumulated Depreciation—Buildings | 13,550 | 8,980 | ||
| Accounts Payable | 35,550 | 24,100 | ||
| Accrued Payables | 3,302 | 2,851 | ||
| Long-Term Notes Payable | 21,480 | 30,900 | ||
| Common Stock, no-par | 150,600 | 125,400 | ||
| Retained Earnings | 36,638 | 42,089 | ||
| $269,730 | $237,810 | |||
Additional data (ignoring taxes):
| 1. | Net income for the year was $40,629. |
| 2. | Cash dividends declared and paid during the year were $20,880. |
| 3. | A 20% stock dividend was declared during the year. $25,200 of retained earnings was capitalized. |
| 4. | Investments that cost $25,280 were sold during the year for $28,320. |
| 5. |
Machinery that cost $3,220, on which $788 of depreciation had accumulated, was sold for $1,624. |
Marcus’s 2014 income statement follows (ignoring taxes).
| Sales revenue | $539,317 | ||
| Less: Cost of goods sold | 380,450 | ||
| Gross margin | 158,867 | ||
| Less: Operating expenses (includes $9,808 depreciation and $5,970 bad debts) | 120,470 | ||
| Income from operations | 38,397 | ||
| Other: Gain on sale of investments | $3,040 | ||
| Loss on sale of machinery | (808 | ) | 2,232 |
| Net income | $40,629 |
(a) Compute net cash flow from operating activities using the direct method. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)
| Net cash flow from operating activities | $ |
(b) Prepare a statement of cash flows using the indirect method. (Show amounts that decrease cash flow with either a – sign e.g. -15,000 or in parenthesis e.g. (15,000).)
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