Chapter 22, Problem 22.10P

Statement of Cash Flows, Indirect Method, Complex Account, Disclosures. Using the information provided in P22.9, prepare the cash flow statement for Orlando incorporated using the direct method. Provide all required disclosures.

Orlando Incorporated Balance Sheets At December 31
Assets	Current Year	Prior Year
Current Assets
Cash	$ 60,750	$ 69,700
Available for-Sale Debt Investments	78,300	110,700
Accounts Receivable - net	128,250	74,250
Merchandise Inventory	182,250	128,250
Total Current Assets	$ 449,550	$ 382,900
Noncurrent Assets
Investments m Affiliate Companies	$ 357,750	$ 135,675
Property, Plant, and Equipment - net	1,842,075	2,066,175
Intangible Assets - net	118,125	168,750
Total Noncurrent Assets	$2,317,950	$2,370,600
Total Assets	$ 2,767,500	$2,753,500
Liabilities
Current Liabilities
Current Portion of Long-Term Debt	$ 33,750	$ 88,830
Accounts Payable	252,450	213,475
Dividends Payable	101,250	74,250
Income Taxes Payable	88,830	78,975
Total Current Liabilities	$ 476,280	$ 455,530
Noncurrent Liabilities

Bonds Payable	$ 540,000	$ 540,000
Less: Discount on Bonds	(173,475)	(195,750)
Notes Payable	304,425	303,750
Deferred Tax Liability	84,375	97,875
Net Obligations under Pension Plans	108,000	81,000
Total Noncurrent Liabilities	$ 863,325	$ 826,875
Total Liabilities	$1,339,605	$1,282,405

Orlando Incorporated Balance Sheets At December 31
	Current Year	Prior Year
Shareholders' Equity
Common Stock, $1 par value	$ 182,250	$ 182,250
Additional Paid-in Capital in Excess of Par - Common	474,525	474,525
Additional Paid-in Capital - Stock Options	22,275	0
Retained Earnings	924,750	706,995
Accumulated Other Comprehensive Income	(175,905)	107,325
Total Shareholders' Equity	$ 1,427,895	$1,471,095
Total Liabilities and Shareholders' Equity	S 2,767,500	$2,753,500

Orlando Incorporated Income Statement For the Current Year Ended December 31
Sales	$2,342,000
Cost of Goods Sold	1,405,200
Gross Profit	$ 936,800
Selling, General, and Administrative Expenses	$ 66,500
Pension Expense	200,150
Bad Debt Expense	2,835
Depreciation Expense	25,500
Amortization Expense	9,000
Total Operating Expenses	$ 303,985
Operating Income	$ 632,815
Loss on Disposal of Equipment	$ (35,000)
Interest Expense	(75,110)
Investment Income (includes loss on sale)	5,000
Equity Earnings from Affiliate Companies	330,350
Income from Continuing Operations before Tax	$ 858,055
Income Tax Expense	(343,222)
Income from Continuing Operations	$ 514,833
Loss from Discontinued Operations - net of tax	(16,478)
Net Income	$ 498,355

Additional Information

• Orlando sold available-for-sale investments that had been acquired for the cost of $74, 250 at a loss of $14, 250 It included this loss in investment income on the income statement
• It acquired additional shares as investments to be carried at fair value Orlando accounted for all investments except for investments carried under the equity method as available-for-sale securities It recorded a $6, 000 unrealized loss for the current year
• It reported accounts receivable net of the allowance for bad debts
• It did not acquire additional plant and equipment during the year but sold a piece of equipment that had cost $198, 600
• It did not increase its percentage ownership of its equity investee (affiliate company)
• It sold one of its franchises at book value
• It signed a $675 promissory note.
• It reported the loss from discontinued operations net of tax and as a cash transaction.

Required

Prepare the current-year cash flow statement for Orlando Incorporated under the indirect method. Present required disclosures.