3 E23-13 (SCF-Direct Method) Brecker Inc., a greeting card company, had the following statements pre- pared as of December 31, 2014. BRECKER INC. COMPARATIVE BALANCE SHEET AS OF DECEMBER 31, 2014 AND 2013 Cash Accounts receivable Short-term investments (available-for-sale) Inventory Prepaid rent Equipment Accumulated depreciation-equipment Copyrights Total assets 12/31/14 $ 6,000 62,000 35,000 40,000 5,000 154.000 (35,000) 46,000 $313,000 12/31/13 $ 7,000 51,000 18,000 60.000 4,000 130,000 (25,000) 50,000 $295,000 Accounts payable Income taxes payable Salaries and wages payable Short-term loans payable Long-term loans payable Common stock, $10 par Contributed capital, common stock Retained earnings Total liabilities and stockholders' equity $ 46,000 4,000 8,000 8,000 60,000 100,000 30,000 57,000 $313,000 $ 40,000 6,000 4,000 10,000 69,000 100,000 30,000 36,000 $295,000 BRECKER INC. INCOME STATEMENT FOR THE YEAR ENDING DECEMBER 31, 2014 $338,150 175,000 163,150 120,000 43,150 Sales revenue Cost of goods sold Gross profit Operating expenses Operating income Interest expense Gain on sale of equipment Income before tax Income tax expense Net income $11,400 2,000 9,400 33,750 6,750 $ 27,000 Additional information: 1. Dividends in the amount of $6,000 were declared and paid during 2014. 2. Depreciation expense and amortization expense are included in operating expenses. 3. No unrealized gains or losses have occurred on the investments during the year. 4. Equipment that had a cost of $20,000 and was 70% depreciated was sold during 2014. Instructions Prepare a statement of cash flows using the direct method. (Do not prepare a reconciliation schedule.)