Reference no: EM13376667

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Mary Kay Cosmetics

Selected data and additional information from the companys records are presented below:

Balance Sheet Data 20X1 20XX

Cash $235,000 246,000

Accounts receivable $120,000 $150,000

Inventories 56,000 50,000

Accounts payable 38,000 70,000

Salaries payable 10,000 5,000

Equipment 110,000 70,000

Accumulated depreciation 28,000 32,000

Bonds payable 100,000 200,000

Common stock 300,000 200,000

Retained earnings 76,000 40,000

Income Statement Data 20X1

Net sales $920,000

Cost of goods sold 700,000

Operating expenses (excluding depreciation expense) 160,000

Net income (Includes depreciation expense and gain) 56,000

Gain on sale of equipment 4,000

Additional information:

Equipment with a cost of $30,000 and a book value of $18,000 was sold for $22,000 during 20X1.

Common stock was issued to retire bonds payable during 20X1.

The only items affecting retained earnings in 20X1 were net income and dividends declared and paid.

1. Prepare the companys statement of cash flows for the year ended December 31, 20X1. Use the indirect method of determining net cash flows from operating activities.