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E23-12 SCF-Direct Method

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E23-12 (SCF—Direct Method) Data for Fairchild Company are presented in E23-11.

Instructions
Prepare a statement of cash flows using the direct method.

20122011
Cash  1,800 1,100
Receivables  1,750 1,300
Inventory  1,600 1,900
Plant assets  1,900 1,700
Accumulated depreciation  (1,200) (1,170)
Long-term investments (Held-to-maturity)  1,300 1,470
 7,150 6,300
Accounts payable  1,200 800
Accrued liabilities  200 250
Bonds payable  1,400 1,650
Capital stock  1,900 1,700
Retained earnings  2,450 1,900
 7,150 6,300
Sales  6,900
Cost of goods sold  4,700
Gross margin  2,200
Selling and administrative expense  930
Income from operations  1,270
Other revenues and gains 
Gain on sale of investments  80
Income before tax  1,350
Income tax expense  540
Net income  810

Additional information:
During the year, $70 of common stock was issued in exchange for plant assets. No plant assets were sold in 2012. Cash dividends were $260.

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