The Following Data Is Provided:
Income Statement
for the Year

question 45

Essay

The following data is provided:
Income Statement
For the Year Ended Dec. 31, 2011 $\begin{array} { | l | l | } \hline \text { Net sales } & \$ 375,000 \\\hline \text { Cost of goods sold } & ( 200,000 ) \\\hline \text { Cash operating expenses } & ( 100,000 ) \\\hline \text { Depreciation and amortization expense } & ( 25,000 ) \\\hline \text { Gain on sale of equipment } & 15,000 \\\hline \text { Net income } & \$ 65,000 \\\hline\end{array}$
Additional information: $\begin{array} { | l | l | } \hline \text { 1. Increase in accounts receivable during2011 } & \$ 10,000 \\\hline \text { 2. Decrease in inventory during 2011 } & \$ 7,500 \\\hline \text { 3. Increase in accounts payable during 2011 } & \$ 11,000 \\\hline \text { 4. Sale of old equipment for cash } & \$ 32,500 \\\hline \text { 5. Dividends declared - } \$ 22,500 \text {; dividends paid } & \$ 20,000 \\\hline \text { 6. New building acquired by issuing common shares } & \$ 21,000 \\\hline \text { 7. Sold bonds for cash - proceeds of } & \$ 37,500 \\\hline\end{array}$ Required:
Prepare a Statement of Cash Flows, direct method. Include a reconciliation of earnings and net operating cash flow.

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Definitions:

Retention

The ability to keep or hold onto information or knowledge over time.

Recognition

The ability to identify previously encountered items, events, or people, demonstrating memory of those items, events, or people.

Sensory Registers

Memory stores that briefly hold sensory information from the environment, such as sights and sounds, before it is processed further or forgotten.

Auditory and Visual

Pertaining to the senses of hearing and sight, often in the context of learning or perception.