Reference no: EM13518254
Hesselbaum Retail Corporation's most recent Income Statement and comparative Balance Sheet is as follows:
Hesselbaum Retail Corporation
Income Statement
For the Year Ended December 31, Year 2
|
Sales
|
$118,000
|
|
Less cost of goods sold
|
56,000
|
|
Gross margin
|
62,000
|
|
Less operating expenses
|
37,000
|
|
Net operating income
|
25,000
|
|
Less loss on sale of equipment
|
2,000
|
|
Income before taxes
|
23,000
|
|
Less income taxes
|
9,000
|
|
Net income
|
$ 14,000
|
Hesselbaum Retail Corporation
Comparative Balance Sheet
At December 31, Year 2, and Year 1
|
Year 2
|
Year 1
|
|
Assets
|
|
|
|
Cash
|
$12,000
|
$ 4,000
|
|
Accounts receivable, net
|
29,000
|
7,000
|
|
Merchandise inventory
|
36,000
|
21,000
|
|
Prepaid expenses
|
6,000
|
8,000
|
|
Equipment
|
72,000
|
88,000
|
|
Accumulated depreciation
|
(60,000)
|
(57,000)
|
|
Total assets
|
$95,000
|
$71,000
|
Liabilities and stockholders' equity
|
Accounts payable
|
$17,000
|
$ 9,000
|
|
Wages payable
|
6,000
|
1,000
|
|
Taxes payable
|
2,000
|
3,000
|
|
Common stock
|
50,000
|
42,000
|
|
Retained earnings
|
20,000
|
16,000
|
|
Total liabilities and stockholders' equity
|
$95,000
|
$71,000
|
No direct exchange transactions occurred at Hesselbaum during Year 2. No equipment was purchased during Year 2. The accumulated depreciation on the equipment sold was $9,000. Cash dividends of $10,000 were declared and paid during Year 2. Hesselbaum uses the direct method to prepare its statement of cash flows.
Required:
Prepare Hesselbaum's operating activities section of its Year2 statement of cash flows.