Question: The following balance sheets and income statement were taken from the records of RosieLee Company:
Direct and Indirect Methods Refer to the information for Rosie-Lee Company above. Additional transactions were as follows:
a. Sold equipment costing $21,600 with accumulated depreciation of $16,200 for $3,600.
b. Issued bonds for $90,000 on December 31.
c. Paid cash dividends of $36,000. d. Retired mortgage of $108,000 on December 31.
Required: 1. Prepare a schedule of operating cash flows using
(a) the indirect method and
(b) the direct method.
2. Prepare a statement of cash flows using the indirect method.