MARCUS INC. - statement of cash flows
Comparative balance sheet accounts of Marcus Inc. are presented below.
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MARCUS INC.
COMPARATIVE BALANCE SHEET ACCOUNTS
AS OF DECEMBER 31, 2014 AND 2013
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Debit Accounts
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December 31, 2014
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December 31, 2013
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Cash
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$42,050
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$34,060
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Accounts Receivable
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70,470
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59,520
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Inventory
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29,440
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24,030
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Investments (available-for-sale)
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22,300
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38,440
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Machinery
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30,120
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18,400
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Buildings
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67,850
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55,860
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Land
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7,500
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7,500
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$269,730
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$237,810
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Credit Accounts
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Allowance for Doubtful Accounts
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$2,150
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$1,480
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Accumulated Depreciation-Machinery
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6,460
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2,010
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Accumulated Depreciation-Buildings
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13,550
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8,980
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Accounts Payable
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35,550
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24,100
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Accrued Payables
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3,302
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2,851
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Long-Term Notes Payable
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21,480
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30,900
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Common Stock, no-par
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150,600
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125,400
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Retained Earnings
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36,638
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42,089
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$269,730
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$237,810
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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).
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Sales revenue
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$539,317
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Less: Cost of goods sold
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380,450
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Gross margin
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158,867
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Less: Operating expenses (includes $9,808 depreciation and $5,970 bad debts)
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120,470
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Income from operations
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38,397
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Other: Gain on sale of investments
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$3,040
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Loss on sale of machinery
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(808) 2,232
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Net income
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$40,629
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(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).)
(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).)