CH. 14 - STATEMENT OF CASH FLOWS Saved 8 A comparative balance sheet for Lomax Company containing data for the last two years is as follows: 2 points Lomax Company Comparative Balance Sheet This Last Year Year Assets Current assets: Cash and cash equivalents $ 73,000 $ 51,600 Accounts receivable 594,000 615,000 Inventory 610,400 422,000 Prepaid expenses 11,600 6,000 eBook Print 1,289,000 1,094,600 Total current assets References 2,380,000 1,808,000 Property, plant, and equipment Less accumulated depreciation 617,400 561,800 1,762,600 1,246,200 Net property, plant, and equipment Long-term investments 84,200 136,000 Loans to subsidiaries 122,000 71,000 Total assets $ $3,257,800 $2,547,800 Liabilities and Stockholders' Equity Current liabilities Accounts payable Accrued liabilities Income taxes payable $ 873,200 $ 572,000 26,200 43,800 135,600 119,600 1,035,000 Total current liabilities 735,400 CH. 14 - STATEMENT OF CASH FLOWS Saved 1,035,000 Total current liabilities 735,400 8 Bonds payable 630,000 406,000 1,665,000 Total liabilities 1,141,400 2. points Stockholders' equity: 1,094,000 1,002,000 Common stock Retained earnings 498,800 404,400 eBook Total stockholders' equity 1,592,800 1,406,400 Total liabilities and stockholders' equity $3,257,800g 2,547,800 Print het en References 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 $382,000 were repaid during this year. c. Equipment was sold during this year for $71,000. The equipment had cost $134,000 and had $42,400 in accumulated depreciation on the date of sale. d. Long-term investments were sold during the year for $114,000. These investments had cost $51,800 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 $3,040,000 1,884,800 1,155,200 Gross margin Selling and administrative expenses 940,600 CH. 14 - STATEMENT OF CASH FLOWS i Saved Selling and administrative expenses 940,600 8 214,600 Net operating income Nonoperating items: Gain on sale of investments Loss on sale of equipment $62,200 20,600 41,600 2 points 256,200 Income before taxes Income taxes 82,000 eBook Net income $ 174,200 Print References 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