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AS OF DECEMBER 31
Assets | 2014 | 2013 | Differences |
Cash | $ 80,000 | $ 51,000 | $ 29,000 |
Accounts Receivable, net | $ 135,000 | $ 122,000 | $ 13,000 |
Merchandise Inventory | $ 75,000 | $ 61,000 | $ 14,000 |
Investments (Available-for-sale) | $ 55,000 | $ 85,000 | $ (30,000) |
Equipment | $ 70,000 | $ 48,000 | $ 22,000 |
Accumulated Depreciation -Equipment | $ (21,000) | $ (14,000) | $ (7,000) |
Buildings | $ 145,000 | $ 145,000 | $ – |
Accumulated Depreciation -Buildings | $ (37,000) | $ (28,000) | $ (9,000) |
Land | $ 40,000 | $ 25,000 | $ 15,000 |
Total Assets | $ 542,000 | $ 495,000 | $ 47,000 |
| | | |
Liabilities and Stockholder’s Equity | | | |
Accounts Payable | $ 70,000 | $ 60,000 | $ 10,000 |
Income Tax Payable | $ 12,000 | $ 10,000 | $ 2,000 |
Long Term Notes Payable | $ 62,000 | $ 70,000 | $ (8,000) |
Common Stock | $ 310,000 | $ 260,000 | $ 50,000 |
Retained Earnings | $ 88,000 | $ 95,000 | $ (7,000) |
| $ 542,000 | $ 495,000 | $ 47,000 |
Income Statement as of 12/31/14
Revenues
Sales $480,000
Loss on Sale of Investments (15,000)
Gain on Sale of Equipment 1,000
466,000
Expenses
Cost of Goods Sold 250,000
Operating Expenses 100,000
Depreciation Expense 24,000
Income Taxes 25,000
399,000
Net Income $ 67,000
Other Information:
Net Income: $67,000
Cash dividends were declared and paid during the year
Some of the Common Stock was issued in exchange for land
Investments that cost $35,000 were sold at a loss of $15,000 during the year
Equipment that cost $10,000 and was 80% depreciated was sold for $3,000 during 2014
Required:
Prepare a Statement of Cash Flows in good form using the INDIRECT METHOD. Note: You may find it helpful to use/show “T” accounts for some or all of your work.
