Presented below is the comparative trial balance and additional information for The IN Crowd Inc., which has a calendar year end. Credit balances are shown in brackets.
The IN Crowd Inc.
Cash $9,900 $(5,000) Accounts Receivable $24,100 $20,000 Merchandise Inventory $5,000 $7,000 Prepaid Expenses $1,000 $500 Equipment $42,000 $35,000 Accumulated Depreciation $(10,000) $(7,000) Accounts Payable $(17,000) $(10,000) Salaries Payable $(3,000) $0 Income Tax Payable $(1,000) $0 Bank Loan Payable $(10,000) $(12,000) Common Shares $(5,000) $(4,000) Retained Earnings $(24,500) $(14,900) Dividends $5,000 $5,000 Revenue $(177,000) $(145,000) Cost of Goods Sold $58,000 $43,000 Salaries Expense $69,000 $55,000 Operating Expenses $26,000 $26,500 Depreciation Expense $5,000 $2,500 Interest Expense $500 $600 Income Tax Expense $3,000 $2,800 Gain on Disposal of Equipment $(1,000) $0
Additional information regarding fiscal 2015:
1. New equipment costing $10,000 was purchased for cash.
2. Old equipment costing $3,000 was sold for $2,000 cash when the carrying amount was $1,000.
3. A cash dividend of $5,000 was paid during the year.
4. Accounts payable pertain to merchandise purchases.
Instructions
Using the direct method, prepare a statement of cash flows for the year ended December 31, 2015.
Using the indirect method, prepare the Operating Activities section of the statement of cash flows for the year ended December 31, 2015.
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