Sparkling Cleaner Company reported net income of $7,450 for 2013 but has been showing an overdraft in its bank account in recent months. The manager has contacted you as the auditor for an explanation. The comparative balance sheet was given to you for examination, along with the following information.

(a) Equipment was sold for $1,700, its cost was $3,000, and its book value was $800. The gain was reported as Other Revenue.

(b) Cash dividends of $4,870 were paid.

Sparkling Cleaner Company

Comparative Balance Sheet

Instructions:
Prepare a statement of cash flows using the indirect method?

Transcribed Image Text:

Dec. 31, 2013 Dec. 31, 2012 2 Land, buildings, and equipment: $35,000 $35,000 (16,500) 18,500 $28,350 $24,150 (20,900) Total land, buildings, and equipment. Liabilities and Stockholders' Equity 3,600 $8,650 $11,300 11,250 $19,500 8,090 $18,000 5,510 27,590 $47.490 Total liabilities and stockholders' equity