1.a

The comparative balance sheet of Yellow Dog Enterprises Inc. atDecember 31, 20Y8 and 20Y7, is as follows:

		Dec. 31, 20Y8		Dec. 31, 20Y7
Assets
Cash		$53,520		$65,930
Accounts receivable (net)		82,240		88,890
Inventories		117,500		110,170
Prepaid expenses		4,790		3,340
Equipment		239,330		197,390
Accumulated depreciation-equipment		(62,230)		(48,410)
	Total assets	$435,150		$417,310
Liabilities and Stockholders'Equity
Accounts payable (merchandise creditors)		$91,380		$87,220
Mortgage note payable		0		125,190
Common stock, $1 par		14,000		9,000
Paid-in capital in excess of par-common stock		213,000		118,000
Retained earnings		116,770		77,900
	Total liabilities and stockholders’ equity	$435,150		$417,310

Additional data obtained from the income statement and from anexamination of the accounts in the ledger for 20Y8 are asfollows:

1. Net income, $99,510.
2. Depreciation reported on the income statement, $30,200.
3. Equipment was purchased at a cost of $58,320 and fullydepreciated equipment costing $16,380 was discarded, with nosalvage realized.
4. The mortgage note payable was not due for six years, but theterms permitted earlier payment without penalty.
5. 5,000 shares of common stock were issued at $20 for cash.
6. Cash dividends declared and paid, $60,640.

Required:

Prepare a statement of cash flows, using the indirect method ofpresenting cash flows from operating activities. Use the minus signto indicate cash outflows, cash payments, decreases in cash, or anynegative adjustments.

Yellow Dog Enterprises Inc.
Statement of Cash Flows
For the Year Ended December 31, 20Y8
Cash flows from (used for) operating activities:
	$
Adjustments to reconcile net income to net cash flow fromoperating activities:
Changes in current operating assets and liabilities:
Net cash flow from operating activities		$
Cash flows from (used for) investing activities:
	$
Net cash flow used for investing activities
Cash flows from (used for) financing activities:
	$
Net cash flow used for financing activities
		$
Cash balance, January 1, 20Y8
Cash balance, December 31, 20Y8		$

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2.a

Sampson Co. sold merchandise to Batson Co. on account, $33,100,terms 2/15, net 45 on December 26. The cost of the goods sold is$24,825. The Batson Co. paid the invoice on December 31, within thediscount period. Assume both Sampson and Batson use a perpetualinventory system.

Required:

Prepare the entries that both Sampson and Batson Companieswould record for the above. Refer to the Chart of Accounts forexact wording of account titles. If no entry is required, simplyskip to the next transaction.