Demonstration Problem Chapter 14 The Carpet Company's 2014 and 2015 balance sheets included the following items: December 31 2015 2014 Debits $ 4,000 9,000 18,000 15,000 $46,000 $10,500 8,000 21,000 18,000 $57,500 Cash Accounts receivable Merchandise inventory Equipment.... Totals.. Credits $ 4,000 7,000 1,000 1,500 27,000 6,000 11,000 $57,500 $3,000 5,000 2,000 Accumulated depreciation, equipment. Accounts payable Taxes payable.. Dividends payable.. Common stock, $10 par value Contributed capital in excess of par, common stock Retained earnings. 25,000 5,000 6,000 $46,000 Totals.... The Carpet Company's income statement was as follows: CARPET COMPANY Income Statement For the Year Ended December 31, 2015 $61,000 Sales Cost of goods sold... Wages and other operating expenses $40,000 6,300 4,200 1.500 Income taxes expense. 52,000 9,000 Depreciation expense. Net income.... Required: Prepare the statement of cash flows under both the direct method and the indirect method for the year ended December 31, 2015. Additional information includes the following: a. Equipment costing $3,500 was purchased during the year. b. Fully depreciated equipment that cost $500 was discarded and its cost and accumulated depreciation were removed from the accounts. C. Two hundred shares of stock were sold and issued at $15 per share. d. The company declared $4,000 of cash dividends and paid $2,500