Comparative balance sheet accounts of Sharpe Company are presented below.
Additional data:
1. Equipment that cost $10,000 and was 60% depreciated was sold in 2014.
2. Cash dividends were declared and paid during the year.
3. Common stock was issued in exchange for land.
4. Investments that cost $35,000 were sold during the year.
5. There were no write-offs of uncollectible accounts during the year
Sharpe's 2014 income statement is as follows.
|
Sales revenue
|
|
$950,000
|
|
Less: Cost of goods sold
|
|
600,000
|
|
Gross profit
|
|
350,000
|
|
Less: Operating expenses (includes depreciation expense and bad debt expense)
|
|
250,000
|
|
Income from operations
|
|
100,000
|
|
Other revenues and expenses
|
|
|
|
Gain on sale of investments
|
$15,000
|
|
|
Loss on sale of equipment
|
(3,000)
|
12,000
|
|
Income before taxes
|
|
112,000
|
|
Income taxes
|
|
45,000
|
|
Net income
|
|
$ 67,000
|
Instructions
(a) Compute net cash provided by operating activities under the direct method.
(b) Prepare a statement of cash flows using the indirect method.