Maurice Tutor
$15/per page/Negotiable
The comparative balance sheet of Canace Products Inc. for December 31, 2014 and 2013 is as follows:
| Â |
12/31/2014 |
12/31/2013 |
|
Assets |
 |  |
|
Cash |
                             643,400 |
                              679,400 |
|
Accounts receivable (net) |
                             566,800 |
                              547,400 |
|
Inventories |
                         1,011,000 |
                              982,800 |
|
Investments |
0 |
                              240,000 |
|
Land |
                             520,000 |
0 |
|
Equipment |
                             880,000 |
                              680,000 |
|
Accumulated depreciation |
                           (244,400) |
                            (200,400) |
| Â | Â | Â |
|
Liabilities and Stockholders' Equity |
 |  |
|
Accounts payable (merchandise creditors) |
                             771,800 |
                              748,400 |
|
Accrued expenses payable (operating expenses) |
                               63,400 |
                                 70,800 |
|
Dividends payable |
                                  8,800 |
                                   6,400 |
|
Common stocke, $2 par |
                               56,000 |
                                 32,000 |
|
Paid-in Capital: excess of issue price over par - common stock |
                             408,000 |
                              192,000 |
|
Retained earnings |
                         2,068,800 |
                           1,879,600 |
| Â |
                         3,376,800 |
                           2,929,200 |
| Â | Â | Â |
|
The income statement for the year ended Dec 31, 2014 is as follows: |
 | |
|
Sales |
 |
                           5,980,000 |
|
Cost of merchandise sold |
 |
                           2,452,000 |
|
Gross profit |
 |
                           3,528,000 |
|
Operating expenses: |
 |  |
|
     Depreciation expense |
                               44,000 |
 |
|
     Other Operating expenses |
                         3,100,000 |
 |
|
          Total Operating expenses |
 |
                           3,144,000 |
|
Operating Income |
 |
                              384,000 |
|
Other expenses: |
 |  |
|
     Loss on sale of investments |
 |
                              (64,000) |
|
Income before income tax |
 |
                              320,000 |
|
Income tax expense |
 |
                              102,800 |
|
Net income |
 |
                              217,200 |
Additional data obtained from an examination of the accounts in the ledger for 2014 are as follows:
a. Equipment and land were acquired for cash
b. There were no disposals of equipment during the year.
c. The investments were sold for $176,000 cash.
d. The common stock was issued for cash
e. There was a $28,000 debit to retained earnings for cash dividends declared.
Instructions:
Prepare a statement of cash flows, using the direct method of presenting cash flows from operating activities.