Problem
Maytag Corporation's balance sheets for the last 2 years are provided below:
|
Balance Sheets
|
2013
|
2012
|
|
Cash
|
$ 82
|
$ 40
|
|
Accounts Receivable
|
180
|
150
|
|
Inventory
|
200
|
200
|
|
Equipment
|
208
|
140
|
|
Accum. Depreciation
|
(72 )
|
(60 )
|
|
Total Assets
|
$598
|
$470
|
|
Accounts Payable
|
$130
|
$ 80
|
|
L/T Notes Payable
|
100
|
50
|
|
Common Stock
|
250
|
250
|
|
Retained Earnings
|
118
|
90
|
|
Total Liabilities & Stockholder Equity
|
$598
|
470
|
The company's income statement for 2013 is provided below:
|
Income Statement
|
|
2013
|
|
Sales
|
|
$345
|
|
Expenses:
|
|
|
|
Cost of Goods Sold
|
$120
|
|
|
Operating Expenses
|
58
|
|
|
Depreciation Expense
|
20
|
|
|
Interest Expense
|
2
|
200
|
|
Operating Income
|
|
145
|
|
Gain on Sale--Equipment*
|
|
5
|
|
Income before Taxes
|
|
150
|
|
Tax Expense
|
|
30
|
|
Net Income
|
|
$120
|
*The company sold equipment for $57 which had a cost of $52. During 2012, the company purchased $120 of new equipment all paid in cash.
A) Prepare the company's Statement of Cash flows for 2013 using the direct method.
B) Prepare the company's Statement of Cash flows for 2013 using the indirect method.