Chapter 6, Problem 6.12P

Statement of Cash Flows, Indirect Method. Prepare the statement of cash flows under the indirect method for Snail Company using the information from P6-10 and the following cash flow information:

Description	Cash Inflow (Outflow)
Cash receipt from sale of property, plant, and equipment	$ 4,000
Cash payment to acquire investment securities	(24,000)
Cash receipt from issuance of common stock	4,334
Cash receipt from issuance of loan	5,000

P6-10. Statement of Cash Flows, Operating Activities Section. Indirect Method. Repeat the requirements of P6-9 under the indirect method.

P6-9. Statement of Cash Flows, Operating Activities Section, Direct Method. Snail Company provided the following balance sheet and income statement for the current year. Prepare the operating activities section of the cash flow statement using the direct method Accrued expenses relate to Selling, General and Administrative Expenses.

Snail Company Balance Sheet At December 31
Assets	Ending	Beginning
Current Assets
Cash	$ 1,000	$ 5,000
Accounts Receivable	5,500	7,000
Merchandise Inventory	4,000	1,800
Total Current Assets	$10,500	$13,800
Noncurrent Assets
Investments in Bonds	$30,000	$ 6,000
Property, Plant, and Equipment – net	$50,000	$60,000
Total Noncurrent Assets	$80,000	$66,000
Total Assets	$90,500	$79,800
Liabilities
Current Liabilities
Accounts Payable	$ 3,200	$ 4,400
Accrued Expenses	6,700	6,550
Income Taxes Payable	1,500	450
Total Current Liabilities	$11,400	$11,400
Noncurrent Liabilities
Notes Payable	$35,000	$30,000
Total Noncurrent Liabilities	$35,000	$30,000
Total Liabilities	$46,400	$41,400
Stockholders’ Equity
Common Stock, $1 Par Value	$10,000	$ 9,000
Additional Paid-in Capital	15,334	12,000
Retained Earnings	18,766	17,400
Total Stockholders’ Equity	$44,100	$38,400
Total Liabilities and Stockholders’ Equity	$90,500	$79,800

Snail Company Income Statement For the year ended December 31
Sales	$56,000
Cost of Goods Sold	33,600
Gross Profit	$22,400
Selling, General, and Administrative Expenses	$11,600
Depreciation Expense	6,000
Total Operating Expenses	$17,600
Income Before Interest and Taxes	$ 4,800
Interest Expense	$ (2,100)
Income Before Tax	$ 2,700
Income Tax Expense	(1,334)
Net Income	$ 1,366