Use the Following Financial Statements and Additional Information to (1)

question 121

Essay

Use the following financial statements and additional information to (1) prepare a complete statement of cash flows for the year ended December 31, Year 2. The cash provided or used by operating activities should be reported using the direct method, and (2) compute the company's cash flow on total assets ratio for Year 2.
Additional Information
a. A $20,000 note payable is retired at its carrying value in exchange for cash.
b. The only changes affecting retained earnings are net income and cash dividends paid.
c. New equipment is acquired for $120,000 cash.
d. Received cash for the sale of equipment that had cost $85,000, yielding a gain of $4,700.
e. Prepaid expenses relate to Other Expenses on the income statement.
f. All purchases and sales of merchandise inventory are on credit.

---

Definitions:

Sororities

Social organizations at colleges and universities primarily for women, focusing on academic, philanthropic, and social activities.

Research Method

A systematic procedure or strategy employed in scientific or academic research to gather, analyze, and interpret data.

Racial Discrimination

Unfair treatment of individuals based on their race, leading to inequalities in various aspects of life, including employment, education, and justice.

Experimental Method

A research methodology that systematically manipulates one variable to test its effect on another, allowing for controlled observations and conclusions about causality.