Mary Kay Cosmetics
Selected Data and Additional Information from the Company's

question 50

Essay

Mary Kay Cosmetics
Selected data and additional information from the company's records are presented below:
$\begin{array}{lll}\underline {\text { Balance Slicet Data }}&\underline { 2014 }&\underline { 2013 }\\ \text { Cash } & \$ 235,000 & 246,000 \\\text { Accountsreceivable } & \$ 120,000 & \$ 150,000 \\\text { Inventories } & 56,000 & 50,000 \\\text { Accounts payable } & 38,000 & 70,000 \\\text { Salaries payable } & 10,000 & 5,000 \\\text { Equipment } & 110,000 & 70,000 \\\text { Accumulated depreciation } & 28,000 & 32,000 \\\text { Bondspayable } & 100,000 & 200,000 \\\text { Common stock } & 300,000 & 200,000 \\\text { Retained earnings } &76,000& 400,000\\\\\underline {\text { Income Statement Data } }&&\underline { 2014 }\\\text { Net sales } && \$ 920,000 \\\text {Cost of goods sold } &&700,000\\\text { Operating expense (excluding depreciation expense) } &&160,000\\\text { Net income (Includes depreciation expense and gain) } &&56,000\\\text {Gain on sale of equipment } &&4,000\\\end{array}$ Additional information:
1. Equipment with a cost of $\$ 30,000$ and a book value of $\$ 18,000$ was sold for $\$ 22,000$ during 2014 .
2. Common stock was issued to retire bonds payable duing 2014 .
3. The only items affecting retained earnings in 2014 were net income and dividends declared and paid. Refer to Mary Kay Cosmetics.How would the transaction to acquire a building by signing a 20-year mortgage note payable be reported on the statement of cash flows for 2014?

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Definitions:

Real Disposable Income

The income of individuals or the economy after adjusting for inflation, available for spending and saving after income taxes have been accounted for.

Net Exports

The value of a country's total exports minus its total imports; a positive value indicates a trade surplus while a negative value indicates a trade deficit.

Net Taxes

The total taxes paid by individuals or businesses after accounting for allowances, deductions, and credits.

Government Outlays

Government outlays refer to the total amount of money spent by the government, including spending on goods and services, transfer payments, and debt interest. This term is synonymous with government spending but emphasizes the outflow aspect.