Presented Below Are the Comparative December 31 Financial Statements for Martin

question 119

Essay

Presented below are the comparative December 31 financial statements for Martin Industries, Inc. (in $ Millions). Prepare a statement of cash flows for December 31, Year 2 using the indirect method.
$\begin{array}{c}\text { Martin Industries, Inc.}\\\text { Balance Sheets}\\\text { At December 31, Year 2 and Year 1}\\\begin{array}{lrr}&\underline{\text { Year } 2} & \underline{\text{Year} 1}\\\text { Cash } & \$ 96,719 & \$ 28,694 \\\text { Accounts Receivable } & 100,000 & 85,313 \\\text { Inventory } & 206,250 & 181,250 \\\text { Prepaid Insurance } & 1,875 & 2,500 \\\text { Long-term Investments } & 19,375 & 106,250 \\\text { Land, Buildings, and Equipment } & 1,562,500 & 1,406,250 \\\text { Accumulated Depreciation } & (762,500) & (715,000)\\\\\text { Total Assets }&\$ 1,224,219& \$ 1,095,257\\\\\text { Accounts Payable } & \$ 95,425 & \$ 185,838 \\\text { Salaries Payable } & 25,000 & 30,625 \\\text { Notes Payable (long-term) } & 31,250 & 93,750 \\\text { Bonds Payable } & 250,000 & - \\\text { Common Stock } & 375,000 & 375,000 \\\text { Retained Earnings } & \underline{447,544} & \underline{410,044} \\& \underline{\$ 1,224,219} & \underline{\$ 1,095,257}\end{array}\end{array}$

Additional information for Year 2
(1) Sold available for sale securities costing $86,875 for $92,500.
(2) Equipment costing $25,000 with a book value of $6,250 was sold for $7,500
(3) Issued 8% bonds at face value for $250,000.
(4) Purchased new equipment for $181,250 and paid cash.
(5) Paid cash dividends of $25,000.
(6) Net income was $62,500.

Appreciate the complexities and challenges involved in designing an optimal reward system.

Know the initial steps and strategies in formulating a compensation plan.

Understand the role of compensation in stakeholders' perspectives, including shareholders.

Acknowledge the significance of job enrichment and its effects on turnover and work quality.

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Definitions:

Promissory Estoppel

A rule of law that bars an individual from retracting a commitment made to another if the second party has justifiably depended on this pledge to their harm.

Justifiable Reliance

A principle in contract law that an individual can act based on the assurance or promise of another, assuming such dependence is reasonable and logical.

Contract Enforcement

The legal mechanisms and procedures used to ensure that the terms of a contract are fulfilled by the parties involved, or to seek remedies in cases of breach.

Restatement

A revision or rewriting of legal documents or statutes for clarification and simplification without changing the fundamental meaning.