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The following information is available for the Arthur Corporation: Arthur Corporation Balance Sheets At December 31 2007 2006 Assets: Cash
The following information is available for the Arthur Corporation:
Arthur Corporation
Balance Sheets
At December 31
2007
2006
Assets:
Cash...........................................................................
$ 24,640
$ 23,040
Accounts receivable...................................................
32,180
29,400
Merchandise inventory...............................................
73,125
61,710
Long-term investments..............................................
55,900
56,400
Equipment...................................................................
175,500
145,500
Accumulated depreciation..........................................
(33,550
)
(31,200
)
Total assets...................................................................
$327,795
$284,850
Liabilities:
Accounts payable.......................................................
$ 65,000
$ 40,380
Income taxes payable................................................
10,725
10,200
Bonds payable............................................................
48,750
66,000
Total liabilities.................................................................
$124,475
$116,580
Equity:
Common stock...........................................................
117,000
96,000
Contributed capital in excess of par..........................
13,000
9,000
Retained earnings......................................................
73,320
63,270
Total equity.................................................................
$203,320
$168,270
Total liabilities and equity..............................................
$327,795
$284,850
Arthur Corporation
Income Statement
For Year Ended December 31, 2007
Sales............................................................
$240,000
Cost of goods sold......................................
$80,900
Depreciation expense.................................
29,400
Other operating expenses..........................
48,000
Interest expense.........................................
2,000
(160,300
)
Other gains (losses):
Loss on sale of equipment.......................
(8,400
)
Income before taxes...................................
71,300
Income taxes expense................................
(27,650
)
Net income..................................................
$ 43,650
Additional Information:
(1) There was no gain or loss on the sales of the long-term investments, nor on the bonds retired.
(2) Old equipment with an original cost of $37,550 was sold for $2,100 cash.
(3) New equipment was purchased for $67,550 cash.
(4) Cash dividends of $33,600 were paid.
(5) Additional shares of stock were issued for cash.
Prepare a complete statement of cash flows for calendar-year 2007 using the direct and indirect method.
Expert Solution
PFA
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