The Following Information Is Available for the Arthur Corporation

question 6

Essay

The following information is available for the Arthur Corporation:
$\begin{array}{c} \text { ARTHUR CORPORATION}\\ \text { Balance Sheets}\\ \text { At December 31}\\\begin{array}{|l|r|r|}\hline & 2013 & 2012 \\\hline \text { Assets: } & & \\\hline \text { Cash } & \$ 24,640 & \$ 23,040 \\\hline \text { Accounts receivable } & 32,180 & 29,400 \\\hline \text { Merchandise inventory } & 73,125 & 61,710 \\\hline \text { Long-term investments } & 55,900 & 56,400 \\\hline \text { Equipment } & 175,500 & 145,500 \\\hline \text { Accumulated depreciation } & (33,550) & (31,200) \\\hline \text { Total assets } & \underline{\$ 327,795} & \$ 284,850 \\\hline\\\hline \text { Liabilities: } & & \\\hline \text { Accounts payable } & \$ 65,000 & \$ 40,380 \\\hline \text { Income taxes payable } & 10,725 & 10,200 \\\hline \text { Bonds payable } & \underline{48,750} & \underline{66,000} \\\hline \text { Total liabilities } & \$ 124,475 & \$ 116,580 \\\hline \text { Equity: } & & \\\hline \text { Common stock } & 117,000 & 96,000 \\\hline \text { Contributed capital in excess of par } & 13,000 & 9,000 \\\hline \text { Retained earnings } & \underline{73,320} & \underline{63,270} \\\hline \text { Total equity } & \$ 203,320 & \$ 168,270 \\\hline \text { Total liabilities and equity } & \$ 327,795 & \$ 284,850 \\\hline \end{array}\end{array}$

$\begin{array}{c} \text {ARTHUR CORPORATION}\\ \text { Income Statement }\\ \text {For Year Ended December 31, 2013}\\\begin{array}{|l|r|r|}\hline \text { Sales } & & \$ 240,000 \\\hline \text { Cost of goods sold } & \$ 80,900 & \\\hline \text { Depreciation expense } & 29,400 & \\\hline \text { Other operating expenses } & 48,000 & \\\hline \text { Interest expense } & 2,000 & (160,300) \\\hline\text { Other gains (losses): } & & \\\hline \text { Loss on sale of equipment } & & (8,400) \\\hline \text { Income before taxes } & & 71,300 \\ \hline \text { Income taxes expense } & & (27,650) \\\hline \text { Net income } & & \$ 43,650 \\ \hline\end{array}\end{array}$

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:

Handscroll

A long, narrow scroll for displaying a series of scenes in East Asian art, viewed by unrolling from right to left.

Gu Kaizhi

A celebrated Chinese painter and poet of the Jin Dynasty, often considered the founder of classical Chinese landscape painting, known for works like "The Admonitions Scroll."

Zhou Jichang

A Chinese painter known for his contributions to the "Hundred Ramas" series, illustrating scenes from Buddhist lore with meticulous detail and vibrant colors.

Confucius

An influential Chinese philosopher and social thinker, living in the 5th century BCE, whose teachings focus on ethics, morality, and social relationships.