Part B – 10 Points Hartman, Inc. has prepared the following comparative balance sheets for 2012 and 2013: 2013 2012 Cash $ 287,000 $ 153,000 Accounts receivable 149,000 117,000 Inventory 150,000 180,000 Prepaid expenses 18,000 27,000 Plant assets 1,280,000 1,050,000 Accumulated depreciation (450,000) (375,000) Patent 153,000 174,000 $1,587,000 $1,326,000 Accounts payable $ 153,000 $ 168,000 Accrued liabilities 60,000 42,000 Mortgage payable — 450,000 Preferred stock 525,000 — Additional paid-in capital—preferred 120,000 — Common stock 600,000 600,000 Retained earnings 129,000 66,000 $1,587,000 $1,326,000 1. The Accumulated Depreciation account has been credited only for the depreciation expense for the period. 2. The Retained Earnings account has been charged for dividends of $158,000 and credited for the net income for the year. The income statement for 2013 is as follows: Sales $1,980,000 Cost of sales 1,089,000 Gross profit 891,000 Operating expenses 670,000 Net income $ 221,000 Instructions From the information above, prepare a schedule of cash provided (used) by operating activities using the direct method on the next page. You do not have to reconcile to the indirect method. Hartman, Inc. Schedule of Cash Provided by Operating Activities – Direct Method For Year Ended December 31, 2013 Increase (Decrease) in Cash Cash flows from operating activities Cash received from customers (1) $ Cash paid to suppliers (2) Operating expenses paid (3) Net cash provided by operating activities $ SHOW NUMERIC COMPUTATIONS HERE FOR (1), (2), and (3) above: (1) (2) (3)