Question

Comparative balance sheets and the income statements for Ellis Corporation are presented below:

Comparative Balance Sheet
	Ending Balance			Beginning Balance
Assets:
Current assets:
Cash and cash equivalents	$	49,500		$	30,600
Accounts receivable		39,100			43,600
Inventory		71,000			63,000
Total current assets		159,600			137,200
Long-term investments		176,600			208,000
Property, plant, and equipment		303,000			165,000
Less accumulated depreciation		57,200			51,000
Total assets	$	582,000		$	459,200
Liabilities and stockholders' equity:
Current liabilities:
Accounts payable	$	38,200		$	42,400
Accrued liabilities		25,400			30,600
Income taxes payable		16,200			20,600
Total current liabilities		79,800			93,600
Bonds payable		124,800			31,500
Total liabilities		204,600			125,100
Stockholders’ equity:
Common stock		315,700			288,900
Retained earnings		61,700			45,200
Total stockholders' equity		377,400			334,100
Total liabilities and stockholders' equity	$	582,000		$	459,200

Income Statement
Sales	$	153,000
Cost of goods sold		81,900
Gross margin		71,100
Selling and administrative expense		16,800
Net operating income		54,300
Loss on sale of investment		2,500
Income before taxes		51,800
Income taxes		24,000
Net income	$	27,800

The following additional information is available for the year:

* During the year, the company sold long-term investments for $28,900 that had been purchased for $31,400.

* The company did not sell any property, plant, and equipment during the year or repurchase any of its own common stock.

* All sales were on credit.

* The company paid a cash dividend of $11,300.

* The company paid cash to retire $15,900 of bonds payable.

Required:

a. Using the indirect method, determine the net cash provided by (used in) operating activities.

b. Using the direct method, determine the net cash provided by (used in) operating activities.

c. Using the net cash provided by (used in) operating activities amount from either part a or b, prepare a statement of cash flows.

Answer 1