Statement of Cash Flows

The condensed financial information of the Tea International Technology Inc. for 2015 is shown below
for the preparation of the Statement of Cash Flows.

Requirement: Prepare the Statement of Cash Flows under both Direct and Indirect Methods

Tea International Technology Inc.

Condensed Financial Information
Statement of Financial Position Information
Balances
Accounts Jan 1, 2015 Dec 31, 2015
Cash $ 3,500 $ 5,500 + 2k
Accounts receivable 4,400 3,600
Inventory 5,000 6,600
Land 8,200 12,200
Buildings and equipment 35,700 48,700
Accumulated depreciation (6,000) (8,700)
Total Assets $ 50,800 $ 67,900

Accounts payable $ 5,100 $ 3,200

Salaries payable 1,400 1,800
Bonds payable, 10% 7,000 15,000
Ordinary shares, $10 par 8,000 9,000
Additional paid-in capital 16,000 19,000
Retained earnings 13,300 19,900
Total Liabilities and Equity $ 50,800 $ 67,900

Income Statement for 2015

Sales revenue $ 80,000
Cost of goods sold 48,600
Gross profit $ 31,400
Operating expenses
Depreciation expense $ 3,400
Other expenses 15,900 19,300
Operating income $12,100
Other revenues and expenses:
Gain on sale of equipment $ 600
Interest expense 700 100
Income before income taxes $12,000
Income tax expense 3,600
Net income $ 8,400

Retained Earnings Information for 2015

Beginning retained earnings $ 13,300
Add: Net income 8,400
TOTAL $ 21,700
Less: Dividends (1,800)
Ending retained earnings $ 19,900
 Supplementary Information for 2015
a. Equipment was purchased for cash at a cost of $ 15,200.
b. Ten-year bonds payable with a face value of $ 8,000 were issued for $ 8,000 at the end of the
year.
c. Land was acquired through the issuance for 100 ordinary shares of $10 par shares when the stock
was selling at a market price of $40 per share.
d. Equipment with a cost of $ 2,200 and a book value of $ 1,500 was sold for $ 2,100 cash.

Additional information: ????

a. Purchase of equipment worth $15,200 – investing – negative
b. Payment of Bond payable $8,000 – financing – negative
c. Land acquisition of worth $4000 – investing – positive
d. Sale of equipment 2100 – 1500 = 600 – investing – positive