Problem:
The income statement and supplemental information for Xtra Company are provided below:
Xtra Company
Income Statement
Year Ended, December 31,2003
Revenues:
Sales $171,750
Interest revenue 6.000 $177,750
Expenses:
Cost of goods sold $18,900
Advertising expense 8,250
Depreciation 21,750
Salaries 4,860
Interest expense 1,500
Income tax expense 6.750 $ 62.010
Net income $115 740
Supplemental information:
a. Acquired equipment for $87,000 by paying cash of $75,750 and issuing a note payable for the difference
b. Beginning cash balance, $15,020; Increase in cash, $86,490
c. Collections from customers were $5,250 more than sales
d. Interest revenue, interest expense, and income tax expense equal their cash amounts
e. Issued stock for cash, $22,500
f. Payment of dividends, $8,250
g. Payment of long-term note payable, $11,250
h. Payments to employees were $750 more than salary expense
i. Payments to suppliers were $6,750 less than the sum of cost of goods sold plus advertising expense
j. Sold land for $10,500
Prepare the company's statement of cash flows. Use the direct method of reporting cash flow from operating activities.