4-52. Preparing a Statement of Cash Flows (Indirect Method) Rainbow Company's income statement and comparative balance sheets follow. Auto Zoom LO3, 4, 5 $750,000 15,000 765,000 RAINBOW COMPANY Income Statement For Year Ended December 31, 2013 Sales Dividend income Total revenue.... Cost of goods sold. $440,000 Wages and other operating expenses. 130,000 Depreciation expense.. 39,000 Patent amortisation expenso.. 7,000 Interest expense ........ 13,000 Income tax expense 44,000 Loss on sale of equipment... 5,000 Gain on sale of investments (3,000) Net Income. . ... 675,000 $ 90,000 RAINBOW COMPANY Balance Sheets Dec. 31, 2013 Dec. 31, 2012 $ 19,000 40,000 103,000 10,000 Assets Cash and cash equivalents.. Accounts receivable Inventory Prepaid expenses Long-term investments.. Land.. Buildings Accumulated depreciation Buildings. Equipment Accumulated depreciation--Equipment Patents.. Total assets Liabilities and Stockholders' Equity Accounts payable 190,000 445,000 (91,000) 179,000 (42,000) 50,000 $903,000 $ 25,000 30,000 77,000 6,000 57,000 100,000 350,000 (75,000) 225,000 (46,000) 32,000 S781,000 $ 20,000 $ 16,000 RAINBOW COMPANY Balance Sheets Dec. 31, 2013 Dec 31, 2012 $ 19,000 40,000 103,000 10,000 190,000 445,000 (91,000) 179,000 (42,000) 50,000 $903,000 Assets Cash and cash equivalents... Accounts receivable Inventory ...... Prepaid expenses. Long-term investments. Land.. Buildings Accumulated depreciation-Buildings. Equipment Accumulated depreciation Equipment Patents.. Total assets.. Liabilities and Stockholders' Equity Accounts payable Interest payable. Income tax payable. Bonds payable.. Preferred stock ($100 par value). Share capital ($5 par value) Contributed surplus Retained eamings... Total liabilities and equity. $ 25,000 30,000 77,000 6,000 57,000 100,000 350,000 (75,000) 225,000 (46,000) 32,000 $781,000 ***** ERRE I.. $ 20,000 6,000 8,000 155,000 100,000 379,000 133,000 102,000 $903,000 $ 16,000 5,000 10,000 125,000 75,000 364,000 124,000 62,000 S781,000