A comparative palance sneet for Lomax company containing data for the last two years is as follows: Lomax Company Comparative Balance Sheet This Last Year Year Assets Current assets: Cash and cash equivalents $ 94,000 $ 68,400 Accounts receivable 636,000 667,500 Inventory 635,600 443,000 Prepaid expenses 28,400 16,500 Total current assets 1,394,000 1,195,400 2,485,000 1,892,000 Property, plant, and equipment Less accumulated depreciation 642,600 580,700 1,842,400 Net property, plant, and equipment 1,311,300 Long-term investments 128,300 199,000 Loans to subsidiaries 143,000 81,500 Total assets $ 3,507,700$ 2,787,200 Liabilities and Stockholders' Equity Current liabilities Accounts payable Accrued liabilities Income taxes payable $ 906,800 $ 593,000 38,800 62,700 162,900 136,400 Total current liabilities Bonds payable 1,108,500 792,100 735,000 469,000 1,843,500 Total liabilities 1,261,100 Stockholders' equity: Common stock Retained earnings 1,023,000 1,136,000 528,200 503,100 Total stockholders' equity 1,664,200 1,526,100 Total liabilities and stockholders' equity $ 3,507,700$ 2,787,200 The following additional information is available about the company's activities during this year: The following additional information is available about the company's activities during this year: a. The company declared and paid a cash dividend this year. b. Bonds with a principal balance of $403,000 were repaid during this year. c. Equipment was sold during this year for $81,500. The equipment had cost $176,000 and had $67,600 in accumulated depreciation on the date of sale. d. Long-term investments were sold during the year for $156,000. These investments had cost $70,700 when purchased several years ago. e. The subsidiaries did not repay any outstanding loans during the year. f. Lomax did not repurchase any of its own stock during the year. The company reported net income this year as follows: Sales Cost of goods sold $3,460,000 2,145,200 1,314,800 Gross margin Selling and administrative expenses 1,051,900 262,900 Net operating income Nonoperating items: Gain on sale of investments Loss on sale of equipment Income before taxes Income taxes $85,300 26,900 58,400 321,300 103,000 Net income $ 218,300 Required: 1. Using the indirect method, prepare a statement of cash flows for this year. (List any deduction in cash and cash outflows as negative amounts.) Lomax Company Statement of Cash Flows Operating activities: Adjustments to convert net income to cash basis: 0 0 Investing activities: 0 Financing activities: 0 0 Beginning cash and cash equivalents Ending cash and cash equivalents $ 0
