Refer to the financial statement information on the next two pages for Catalina, Inc

Refer to the financial statement information on the next two pages for Catalina, Inc, for fical year ended 12/31/2003. assume the following: Notes Payable are not related to amount owed to regular suppliers due to regular operations. Changes in Property, Plant, and Equipment accounts did involve cash. The only changes in accumulated depreciation were due to Depreciation Expense. Changes in Stockholders’ Equity accounts involved cash. The dividends were cash dividends declared and paid during the year.

Based upon this information, complete, in good form, the following for the 2003 fiscal year:

1. A schedule for the calculation of cash generated from operating activities under the direct method.
2. The complete Statement of Cash Flows by the direct method.
3. The Operating Activities section of the Statement of Cash Flows by the indirect method.

Catalina Inc.
Comparative Balance Sheet
December 31, 2003 and 2002

   Assets     2003  2002
Current assets:
 Cash       $201,197 $212,000
 Government Notes (cash equivalent)   5,700  20,000
 Interest Receivable     385  700
 Accounts receivable      535,800 506,000
 Merchandise Inventory    613,394 675,120
 Supplies and Prepayments    38,143  27,356
  Total Current Assets    $1,394,519 $1,441,176


Property, Plant and Equipment
 Store Equipment     $456,000 $388,000
 Less Accum. Depr.-Store Equipment   (171,000) (140,000)
 Delivery Equipment     427,500 320,000
 Less Accum. Depr.-Delivery Equip.   (118,750) (80,000)
 Office Equipment     361,000 339,900
 Less Accum. Depr.-office Equip.   (76,000) (61,000)
  Total Property, Plant and Equip  878,750 766,900
 Total Assets      $2,273,269 2,208,076

 
LIABILITIES
Current Liabilities
 Notes Payable      $73,241 $118,000
 Accounts Payable     230,153 384,470
 Payroll Taxes Payable     9,300  15,200
 Interest Payable     899  800
  Total Liabilities    $313,593 $518,470

STOCKHOLDER’S EUITY

Common Stock     $990,000 $980,000
Paid – in-capital in excess of par-common st  390,500 390,000
Retained earnings     579,176 319,606
 Total Stockholder’s Equity   1,959,676 $1,689,606
Total liabilities and Stockholder’s Equity  $2,273,269 $2,208,076 

Catalina, Inc.
Income Statement
For the Year Ended December 31, 2003

Net Sales        $2,687,750
Cost of Goods Sold       (1,264,673)
Gross Profit        1,423,077
Operating expenses       (1,035,528)
Operating Income       387,549
Other Revenues and Expenses
 Interest Revenue   $1,008
 Interest Expense   (4,187)   (3,179)
Net Income        $384,370

Catalina, Inc.
Statement of Retained Earnings
For the Year Ended December 31, 2003

Retained Earnings, January 1      $319,606
Net income     $384,370
Less Dividends    (124,800)
Net Increase in Retained Earnings     $259,570
Retained Earnings, December 31     $579,176