comparative balance sheet accounts of marcus inc are presented 242629

Comparative balance sheet accounts of Marcus Inc. are presented below.

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Additional data (ignoring taxes):

1. Net income for the year was $42,500.

2. Cash dividends declared and paid during the year were $21,125.

3. A 20% stock dividend was declared during the year. $25,000 of retained earnings was capitalized.

4. Investments that cost $25,000 were sold during the year for $28,750.

5. Machinery that cost $3,750, on which $750 of depreciation had accumulated, was sold for $2,200.

Marcus’s 2012 income statement follows (ignoring taxes).

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Instructions

(a) Compute net cash flow from operating activities using the direct method.

(b) Prepare a statement of cash flows using the indirectmethod.

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