Reference no: EM131087178

MARCUS INC. - statement of cash flows

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

MARCUS INC. COMPARATIVE BALANCE SHEET ACCOUNTS AS OF DECEMBER 31, 2014 AND 2013
Debit Accounts	December 31, 2014	December 31, 2013
Cash	$42,050	$34,060
Accounts Receivable	70,470	59,520
Inventory	29,440	24,030
Investments (available-for-sale)	22,300	38,440
Machinery	30,120	18,400
Buildings	67,850	55,860
Land	7,500	7,500
$269,730	$237,810
Credit Accounts
Allowance for Doubtful Accounts	$2,150	$1,480
Accumulated Depreciation-Machinery	6,460	2,010
Accumulated Depreciation-Buildings	13,550	8,980
Accounts Payable	35,550	24,100
Accrued Payables	3,302	2,851
Long-Term Notes Payable	21,480	30,900
Common Stock, no-par	150,600	125,400
Retained Earnings	36,638	42,089
$269,730	$237,810

Additional data (ignoring taxes):

1. Net income for the year was $40,629.
2. Cash dividends declared and paid during the year were $20,880.
3. A 20% stock dividend was declared during the year. $25,200 of retained earnings was capitalized.
4. Investments that cost $25,280 were sold during the year for $28,320.
5. Machinery that cost $3,220, on which $788 of depreciation had accumulated, was sold for $1,624.

Marcus's 2014 income statement follows (ignoring taxes).

Sales revenue	$539,317
Less: Cost of goods sold	380,450
Gross margin	158,867
Less: Operating expenses (includes $9,808 depreciation and $5,970 bad debts)	120,470
Income from operations	38,397
Other: Gain on sale of investments	$3,040
Loss on sale of machinery	(808) 2,232
Net income	$40,629

(a) Compute net cash flow from operating activities using the direct method. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)

(b) Prepare a statement of cash flows using the indirect method. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)