Chapter 22, Problem 22.11E

Statement of Cash Flows, Indirect Method. Disclosures. Complete the requirements of E22-10 using the direct method.

Starland Corporation Balance Sheets At December 31
Assets	Current Year		Prior Year
Current Assets
Cash	$ 270,001		$ 145,847
Accounts Receivable - net	268,363		255,368
Merchandise Inventory	381,358		268,363
Prepaid Expenses	55,000		75,000
Total Current Assets	$ 974,722		$ 744,578
Noncurrent Assets
Property. Rant, and Equipment - net	$3,854,542		$4,323,471
Total Noncurrent Assets	$3,854,542		$4,323,471
Total Assets	$4,829,264		$5,068,049
Liabilities
Current Liabilities
Current Portion of Long-Term Debt	$ 125,622		$ 360,877
Accounts Payable	528,252		446,695
Income Taxes Payable	185,877		165,255
Total Current Liabilities	$ 839,751		$ 972,827
Noncurrent Liabilities
Notes Payable		$ 730,854		$ 635,597
Total Noncurrent Liabilities		S 730,854		$ 635,597
Total Liabilities		$1.570,605		$1,608,424
Shareholders' Equity
Common Stock. $1 par value		$ 381,358		$ 381,358
Additional Paid-in Capital in Excess		1,129,950		1,129,950
of Par - Common
Retained Earnings		2,287,351		2,083,317
Total Shareholders' Equity		$3,798,659		$3,594,625
Less: Treasury Stock at Cost		(540,000)		(135.000)
Total Liabilities and Shareholders' Equity		$4,829,264		$5,068,049

Starland Corporation Income Statement For the Current Year Ended December 31
Sales	$1,875,050
Cost of Goods Sold	1,125,030
Gross Profit	$ 750,020
Selling, General, and Administrative Expenses	$ 205,000
Bad Debt Expense	4,394
Depreciation Expense	39,525
Total Operating Expenses	$ 248,919
Operating Income	S 501,101
Loss on Disposal of Equipment	$ (50,000)
Interest Expense	(12,500)
Income before Tax	$ 438,601
Income Tax Expense	(175,440)
Net Income	$ 263,161

Additional information

• during the current year
• Starland sold equipment with a carrying value of $429, 404 at a $50,000 loss.
• The company borrowed additional funds by issuing a long-term note Any debt payments made during the year reduced the current portion of long-term debt.

Required

Prepare the cash flow statement for Starland Corporation for the current year using the indirect method Provide all required disclosures.