Refer to the information reported about Memphis Corporation in Problem 16-4A. Requi...

Refer to the information reported about Memphis Corporation in Problem 16-4A.

Required

Prepare a complete statement of cash flows using a spreadsheet as in Exhibit 16A.1; report operating activities under the indirect method. Identify the debits and credits in the Analysis of Changes columns with letters that correspond to the following list of transactions and events.

a. Net income was $127,000.

b. Accounts receivable increased.

c. Merchandise inventory increased.

d. Accounts payable increased.

e. Income taxes payable increased.

f. Depreciation expense was $57,000.

g. Purchased equipment for $105,000 cash.

h. Issued 14,000 shares at $5 cash per share.

i. Declared and paid $85,000 of cash dividends.

REFER Problem 16-4A.

Memphis Corp., a merchandiser, recently completed its 2009 operations. For the year, (1) all sales are credit sales, (2) all credits to Accounts Receivable reflect cash receipts from customers, (3) all purchases of inventory are on credit, (4) all debits to Accounts Payable reflect cash payments for inventory, (5) Other Expenses are all cash expenses, and (6) any change in Income Taxes Payable reflects the accrual and cash payment of taxes. The company’s balance sheets and income statement follow.

Additional Information on Year 2009 Transactions

a. Purchased equipment for $105,000 cash.

b. Issued 14,000 shares of common stock for $5 cash per share.

c. Declared and paid $85,000 in cash dividends.

Required

Prepare a complete statement of cash flows; report its cash inflows and cash outflows from operating activities according to the indirect method.