activities. Report noncash investing and financing activities in an accompanying schedule. 2. Evaluate Majestic's cash flows for the year. Mention all three categories of cash flows, and give the reason for your evaluation. P12-713. (Learning Objectives 2,3: Prepare the statement of cash flows-indirect method) The 2014 and 2013 comparative balance sheets and 2014 income statement of Sommar Medical Supply Corp. follow: Sommar Medical Supply Corp. Comparative Balance Sheets December 31, 2014 2013 (Decrease) $ $50.700 64.000 65,200 1.000 15,200 60.000 53.200 2,500 $ 35.500 4,000 12 000 (1,500) 48.400 66,100 $ 295 400 32,600 15,800 49100117.000 $ 212,600 $82.800 4 Current assets Cash and cash equivalents Accounts receivable Inventories Prepaid expenses 9 Plant assets 10 Land 11 Equipment, net 12 Total assets 13 Current liabilities: 14 Accounts payable 15 Salary payable 16 Other accrued liabilities 17 Long-term liabilities: 18 Notes payable 19 Stockholders' equity 20 Common stock no par 21 Retained earnings 22 Total liabilities and stockholders' equity $ $35.400 32,000 22 800 26,000 36,500 24 100 14.500 11.300 58,000 30,000 78.000 83.200 64,000 $ 295.400 69.000 27.000 $ 212.600 14,200 37000 $ 827800 Chapter 12 $ 571,000 Sommar Medical Supply Corp. Income Statement Year Ended December 31, 2014 2 Revenues: Sales revenue 4 Expenses: Cost of goods sold Salary expense Depreciation expense Other operating expense Interest expense 10 Income tax expense Total expenses 12 Net income 13 $ 248,300 94,900 15.000 57,200 24,800 39.100 479,300 $ 91.700 Sommar Medical Supply had no noncash investing and financing transactions during 2014 During the year, there were no sales of land or equipment, no payment of notes payable, no retirements of stock, and no treasury stock transactions. Requirements 1. Prepare the 2014 statement of cash flows, formatting operating activities by using the indirect method. 2. How will what you learned in this problem help you evaluate an investment