The comparative balance sheet of Charles Inc. for December 31, 2014 and 2013 is shown as follows:
|
Dec. 31, 2014
|
Dec. 31, 2013
|
|
Assets
|
|
|
|
Cash
|
$469,320
|
439,440
|
|
Accounts Receivable (Net)
|
170,880
|
156,720
|
|
Inventories
|
481,320
|
462,840
|
|
Investments
|
0
|
180,000
|
|
Land
|
246,000
|
0
|
|
Equipment
|
528,840
|
414,840
|
|
Accum. Depreciation - Equipment
|
(124,800)
|
(111,000)
|
|
Total Assets
|
1,771,560
|
1,542,840
|
|
Liabilities & Stockholders' Equity
|
|
|
|
Accounts Payable (merchandise creditors)
|
318,360
|
303,720
|
|
Accrued expenses payable (operating exp)
|
31,680
|
39,480
|
|
Dividends payable
|
18,000
|
14,400
|
|
Common stock, $2 par
|
95,000
|
75,000
|
|
Paid-in-capital, excess of issue price over par - common stock
|
290,000
|
210,000
|
|
Retained Earnings
|
1,018,520
|
900,240
|
|
Total Liabilities & Stockholders Equity
|
1,771,560
|
1,542,840
|
The income statement for the year ended December 31, 2014, is as follows:
| Sales |
|
5,261,701 |
| Cost of Merchandise Sold |
|
3,237,970 |
| Gross Profit |
|
2,023,731 |
| Operating Expenses |
|
|
| Depreciation Expense |
13,800 |
|
| Other Operating Expense |
1,722,798 |
|
| Total Operating Expenses |
|
1,736,598
|
| Operating Income |
|
287,133 |
| Other Income: |
|
|
| Gain on Sale of Investments |
|
30,000 |
| Income before Income Taxes |
|
317,133 |
| Income Tax Expense |
|
126,853 |
| Net Income |
|
190,280 |
Additional data obtained from an examination of the accounts in the ledger for 2014 are as follows:
-
The investments were sold for $210,000 cash
-
Equipment and land were acquired for cash
-
There were no disposals of equipment during the year
-
The common stock was issued for cash
-
There was a $190,280 credit to retained earnings for net income
-
There was a $72,000 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.