Lehman Company Income Statement FYE 12/31/13 Sales 676,300 Cost of Goods Sold (350,000) Gross Profit 326,300 Operating Expenses (240,000) Operating Income 86,300 Interest Expense (22,800) Gain on Sale of Equipment 4,000 Income before tax 113,100 Income tax expense (13,500) Net Income 54,000 Dividends of $12,000 were declared and paid Depreciation and amortization expenses are included in operating expenses Equipment that had a cost of $40,000, with a BOOK VALUE of $12,000 was sold during 2013. Assume that Operating Expenses are paid in cash, unless otherwise calculated. Assume Inventory is purchased on credit. No intangible assets were sold.

12/31/2012 Debit Credit 12/31/2013

Cash 14,000 12,000

Accounts Receivable 102,000 124,000

Short-term Investments 36,000 70,000

Inventories 120,000 80,000

Prepaid rent 8,000 10,000

Equipment 260,000 308,000

Patent 100,000 92,000

640,000 696,000

Accumulated Depreciation, Eqt. 50,000 70,000

Accounts Payable 80,000 92,000

Income taxes payable 12,000 8,000

Wages payable 8,000 16,000

Short-term LOANSpayable 20,000 16,000

Long-term LOANS payable 138,000 120,000

Common stock ($10 par) 200,000 200,000

APIC 60,000 60,000

Retained Earnings 72,000 114,000

640,000 696,000

How much is the Cash Flow from Operating Activities?

How much is the Cash Flow from Investing Activities?

How much is the Cash Flow from Financing Activities?

Using the DIRECT METHOD, how much did Lehman collect from its customers?

Using the DIRECT METHOD, how much did Lehman pay for inventory?

Using the DIRECT METHOD, how much did Lehman pay for operating expenses?

Using the DIRECT METHOD, how much did Lehman show as a Gain on the sale of equipment in the Cash Flows from Operating Activities section?