Make a complete statement of cash flows by using the

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Reference no: EM13390770

Galley Corp., a merchandiser, recently completed its 2011 operations. For the year, (1) all sales are credit sales, (2) all credits to Accounts Receivable reflect cash receipts from customers, (3) all purchases of inventory are on credit, (4) all debits to Accounts Payable reflect cash payments for inventory, (5) Other Expenses are all cash expenses, and (6) any change in Income Taxes Payable reflects the accrual and cash payment of taxes. The company's balance sheets and income statement follow.

GALLEY CORPORATION Comparative Balance Sheets December 31, 2011 and 2010
	2011		2010
Assets
Cash	$	156,327	$	134,694
Accounts receivable		101,303		93,003
Merchandise inventory		700,944		615,744
Equipment		439,149		343,149
Accum. depreciation-Equipment		(173,690)		(117,590)

Total assets	$	1,224,033	$	1,069,000

Liabilities and Equity
Accounts payable	$	69,000	$	100,000
Income taxes payable		31,094		27,794
Common stock, $2 par value		549,800		515,800
Paid-in capital in excess of par value, common stock		255,075		187,075
Retained earnings		319,064		238,331

Total liabilities and equity	$	1,224,033	$	1,069,000

GALLEY CORPORATION Income Statement For Year Ended December 31, 2011
Sales			$	2,013,800
Cost of goods sold				1,228,418

Gross profit				785,382
Operating expenses
Depreciation expense	$	56,100
Other expenses		514,707		570,807

Income before taxes				214,575
Income taxes expense				41,842

Net income			$	172,733

Additional Information on Year 2011 Transactions

a. Purchased equipment for $96,000 cash.
b. Issued 17,000 shares of common stock for $6.00 cash per share.
c. Declared and paid $92,000 in cash dividends.

Required:

Prepare a complete statement of cash flows using a spreadsheet; report operating activities under the indirect method.

Reference no: EM13390770

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