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Statement of Cash Flows

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Refer to the attached financial statement information for Catalina Inc. for fiscal year ended 12/31/2003. Assume the following:
Notes payable are not related to amounts owed to regular suppliers due to regular operations.
Changes in Property, Plant and Equipment accounts did involve cash.
The only changes in accumulated Deprecation were due to Deprecation Expense.
Changes in Stockholders Equity accounts involved cash.
The dividends were cash dividends declared and paid during the year.
* Prepare a schedule for the calculation of cash generated from operating activities under the direct method
* Prepare a complete statement of cash flows by the direct method
* Prepare the Operating Activities section of the statement of the Statement of Cash Flows by the indirect method

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Please see the attached file. The requirements are copied below

Requirement 1
Catalina Inc
Statement of Cash Flows - Direct Method
For the Year Ended December 31, 2003
A. Cash Receipts from Customers
Net Sale 2,687,750
+Beginning Accounts Receivables 506,000
-Ending Accounts Receivable (535,800)
Cash Receipts from Customers 2,657,950
B. Cash payments for inventory:
Cost of Goods Sold 1,264,673
+Ending Inventory 613,394
-Beginning Inventory (675,120)
+Beginning Accounts Payable 384,470
-Ending Accounts Payable (230,153)
Cash paid for inventory 1,357,264
C. Cash paid for operating expenses:
Operating expenses 1,035,528
-Depreciation expense (84,750)
+Ending Supplies and Prepayments 38,143
-Beginning Supplies and Prepayments (27,356)
+ Beginning Payroll Taxes Payable 15,200
- Ending Payroll Taxes Payable (9,300)
Cash ...

Solution Summary

The solution explains how to prepare a statement of cash flows for Catalina Inc using the direct and indirect method