Country Vista Company_Statement of cash flows

Download and review the income statement for the Country Vista Company. You will use the income statement to help you complete Part 1 and Part 2 below.

· Country Vista Income Statement

Country Vista Company
Income Statement
For the Year Ended December 31, 2011
Sales		$2,48,000
Cost of Goods Sold		$1,16,000
Gross Profit		$1,32,000
Operating Expenses
Wages and Salaries Expense	$44,000
Rent Expense	$16,000
Depreciation Expense	$30,000
Other Operating Expenses	$18,000	$1,08,000
Income from Operations		$24,000
Gain on Sale of Equipment		$26,000
Income before Income Taxes		$50,000
Income Tax Expense		$17,500
Net Income		$32,500

Part 1: Indirect Method

Using Excel, prepare the Statement of Cash Flows Indirect Method. Your SOCF should be based upon the income statement and the additional information below:

Additional Information:

· Increase in Accounts Receivables=$4,000

· Increase in Accounts Payables=$16,000

· Increase in Income Taxes Payable=$300

· Decrease in Prepaid Expenses=$10,000

· Decrease in Merchandise Inventory=$14,000

· Decrease in Long Term Notes Payable=$20,000

· Cash Paid to Purchase Land=$50,000

· Cash Paid to Purchase Equipment=$15,000

· Cash Paid to Retire Bonds=$25,000

· Cash Paid to for Dividends=$10,000

· Cash Received from the Sale of common stock=$50,000

· Cash at the start of the year=$24,000

Part 2: Direct Method

Using Excel and the below information please prepare the complete statement of cash flows using the direct method.

Additional Information:

· Cash Received from Customers=$80,000

· Cash Payments for Merchandise=$10,000

· Cash Payments for Operating Expenses=$5,000

· Cash payments for Interest=$6,000

· Cash Payments for Income Taxes=$3,000