94 CHAPTER 4 Sha a Fotos vailable for two 10. Th e statement and balance sheet information are availab firms Firm and Firm B (a) Calculate the amount of dividends Firm A and Firm B paid using the sing the information (b) Prepare a statement of cash flows for each firm using the indirect method (0) Analyze the difference in the two firms. Income Statement for Year Ended December 31, 2015 Firm A Firm B Sales $1,000,000 $1,000,000 Cost of goods sold 700,000 700,000 Gross profit 300,000 300,000 Other expenses Selling and administrative 120,000 115,000 Depreciation 10,000 30,000 Interest expense 20,000 5,000 Earnings before taxes 150,000 150,000 Income tax expense 75,000 75,000 Net Income 75,000 $ 75,000 Changes in Balance Sheet Accounts December 31, 2014, to December 31, 2015 Firm A Firm B Cash and cash equivalents $ 0. $+10,000 Accounts receivable +40,000 +5,000 Inventory +40,000 -10,000 Property, plant, and equipment +20,000 +70,000 Less accumulated depreciation (+10,000) (+30,000) Total Assets $ +90,000 $ +45,000 Accounts payable $-20,000 $ -5,000 Notes payable (current) +17,000 +2,000 Long-term debt +20,000 - 10,000 Deferred taxes (noncurrent) +3,000 +18,000 Capital, stock Retained earnings +70,000 +40,000 Cotal Liabilities and Equity $ +90,000 $ +45,000