The Following Information Is Available for the Arthur Corporation

question 55

Essay

The following information is available for the Arthur Corporation:
$\begin{array}{c} \text { ARTHUR CORPORATION } \\ \text { Balance Sheets } \\ \text { At December 31 } \\\begin{array}{|l|r|r|}\hline &2013&2012\\\hline \text { Assets: }\\\hline \text { Cash } & \$ 24,640 & \$ 23,040 \\\hline \text { Accounts receivable } & 32,180 & 29,400 \\\hline \text { Merchandise inventory } & 73,125 & 61,710 \\\hline \text { Long-term investments } & 55,900 & 56,400 \\\hline \text { Equipment } & 175,500 & 145,500 \\\hline \text { Accumulated depreciation } & (33,550) & (31,200) \\\hline \text { Total assets } & \$ 327,795 & \$ \$ 284,850 \\\hline \\\hline \text { Liabilities: }\\\hline \text { Accounts payable } & \$ 65,000 & \$ 40,380 \\\hline \text { Income taxes payable } & 10,725 & 10,200 \\\hline \text { Bonds payable } & \underline{48,750} & \underline{66,000} \\\hline \text { Total liabilities } & \$ 124,475 & \$ 116,580 \\\hline \text { Equity: }\\\hline \text { Common stock } & 117,000 & 96,000 \\\hline \text { Contributed capital in excess of par } & 13,000 & 9,000 \\\hline \text { Retained earnings } & \underline{73,320} & \underline{63,270} \\\hline \text { Total equity } & \underline{\$ 203,320} & \underline{\$ 168,270} \\\hline \text { Total liabilities and equity } & \$ 327,795 & \$ 284,850 \\\hline\end{array}\end{array}$
$\begin{array}{c} \text { ARTHUR CORPORATION }\\ \text { Income Statement }\\ \text { For Year Ended December 31, 2013 }\\\begin{array}{|l|r|r|}\hline \text { Sales } & & \$ 240,000 \\\hline \text { Cost of goods sold } & \$ 80,900 & \\\hline \text { Depreciation expense } & 29,400 & \\\hline \text { Other operating expenses } & 48,000 & \\\hline \text { Interest expense } & 2,000 & (160,300) \\\hline \text { Other gains (losses): } & & \\\hline {\text { Loss on sale of equipment }} & & (8,400) \\\hline \text { Income before taxes } & & 71,300 \\\hline \text { Income taxes expense } & & (27,650) \\\hline \text { Net income } & & \$ 43,650 \\\hline\end{array}\end{array}$
Additional information:
(1)There was no gain or loss on the sales of the long-term investments, nor on the bonds retired.
(2)Old equipment with an original cost of $37,550 was sold for $2,100 cash.
(3)New equipment was purchased for $67,550 cash.
(4)Cash dividends of $33,600 were paid.
(5)Additional shares of stock were issued for cash.
Required: Prepare a complete statement of cash flows for the 2013 calendar year using the direct method.

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Definitions:

Gastric Juice

A highly acidic fluid secreted by the stomach glands that contains enzymes and hydrochloric acid, aiding in food digestion.

Nervous System

The network of nerve cells and fibers that transmits nerve impulses between parts of the body.

Hormones

Chemical messengers produced by glands in the body, which travel through the bloodstream to target organs or tissues, triggering specific biological responses.

Muscle Cramps

Sudden, involuntary contractions or spasms in one or more muscles, often causing pain and discomfort.