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(1) Prepare a statement of cash flows using the indirect method for the TA Corp for the year 2009.

(1) Prepare a statement of cash flows using the indirect method for the TA Corp for the year 2009.

Increase
(Decrease)

Cash 132,000
Marketable Securities (121,000)
Accounts Receivable 83,200
Allowance for Doubtful Accounts 13,300
Inventory 74,200
Prepaid Expenses (17,800)
Investment in SAS, Inc (20,000)
Plant and Equipment 210,000
Accumulated Depreciation 130,000
Deferred Tax Assets (80,000)
Accounts Payable (80,700)
Accrued Liabilities (74,000)8% Bond Liability 80,000
Common Stock and Additional Paid-In Capital 290,000
Retained Earnings (98,000)

Analysis of the Retained Earnings:

Retained Earnings, December 31, 2008 1,360,000
Add: Net Income 327,000

Deduct: Cash Dividends 185,000
Stock Dividends 240,000

Retained Earnings-Unappropriated, December 31, 2009 1,262,000

Additional Information:

1. On January 2, 2009, marketable securities (available for-sale) costing $121,000 were sold for $155,000.

2. The company paid a cash dividend on February 1, 2009.

3. Accounts receivable of $6,200 and $7,400 were considered uncollectible and written-off in 2009 and 2008, respectively.

4. Major repairs of $33,000 to the equipment were debited to accumulated depreciation during the year. No assets were retired during 2009.

5. TA Corp owns 20% of SAS, Inc. and accounts for their investment using the equity method. SAS paid no dividends during the year and had a net loss of $100,000.

6. During the year, employees exercised 2,000 stock options each having an exercise price of $25 a share. The DTA decrease reflects tax benefits the Company realized upon the exercise of the options.

7. At January 1, 2009, the cash balance was $166,000.

8. Interest and tax expense were $30,000 and $75,000, respectively.




(2) Going back to part (1), assume that net A/R changed from $530,100 to $600,000; inventory from $700,000 to $774,200; A/P from $300,000 to $219,300; sales and cost of sales were $3,000,000 and $2,100,000, respectively.

Had the cash flow statement been prepared using the direct method, what would be the amounts for:

a. Cash Received from Customers


b. Cash Paid to Suppliers
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Accounting-8100633.xls

(1) TA Corp.
Cash flow statement for the year 2009
Cash flow from operating activities:
Net Income
Add: Depreciation expense
Less: Gain on sale of securities
Add: Share of SAS Inc. net loss...

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