MARCUS INC. – statement of cash flows

Comparative balance sheet accounts of Marcus Inc. are presented below.

MARCUS INC.
COMPARATIVE BALANCE SHEET ACCOUNTS
AS OF DECEMBER 31, 2014 AND 2013
December 31
Debit Accounts 2014 2013
Cash $42,050 $34,060
Accounts Receivable 70,470 59,520
Inventory 29,440 24,030
Investments (available-for-sale) 22,300 38,440
Machinery 30,120 18,400
Buildings 67,850 55,860
Land 7,500 7,500
$269,730 $237,810
 
Credit Accounts
Allowance for Doubtful Accounts $2,150 $1,480
Accumulated Depreciation—Machinery 6,460 2,010
Accumulated Depreciation—Buildings 13,550 8,980
Accounts Payable 35,550 24,100
Accrued Payables 3,302 2,851
Long-Term Notes Payable 21,480 30,900
Common Stock, no-par 150,600 125,400
Retained Earnings 36,638 42,089
$269,730 $237,810

Additional data (ignoring taxes):

1. Net income for the year was $40,629.
2. Cash dividends declared and paid during the year were $20,880.
3. A 20% stock dividend was declared during the year. $25,200 of retained earnings was capitalized.
4. Investments that cost $25,280 were sold during the year for $28,320.
5.

Machinery that cost $3,220, on which $788 of depreciation had accumulated, was sold for $1,624.

Marcus’s 2014 income statement follows (ignoring taxes).

Sales revenue $539,317
Less: Cost of goods sold 380,450
Gross margin 158,867
Less: Operating expenses (includes $9,808 depreciation and $5,970 bad debts) 120,470
Income from operations 38,397
Other: Gain on sale of investments $3,040
          Loss on sale of machinery (808 ) 2,232
Net income $40,629

(a) Compute net cash flow from operating activities using the direct method. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)

Net cash flow from operating activities $

(b) Prepare a statement of cash flows using the indirect method. (Show amounts that decrease cash flow with either a – sign e.g. -15,000 or in parenthesis e.g. (15,000).)

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