Direct Method:

Rowe Publishing Company Statement of Cash Flows For the Year Ended December 31, 2013
Cash flow operating activities:
Cash collected from customer	$ 1,042,000
Cash paid to suppliers	(586,000)
Cash payments to employees	(347,000)
Cash payments for interest	(16,000)
Paid income taxes	(29,000)
Net cash provided by operating activities		$ 64,000
Cash flows from investing activities:
Equipment purchase	$ 25,000
Net cash used for investing activities		(25,000)
Cash flows from investing activities:
Repayment of notes payable	$ (35,000)
Proceeds from issuance of bonds payable	50,000
Payment of dividends	(35,000)
Net cash used for financing activities		(20,000)
Net increase (decrease) in cash		$ 19,000
Cash, 12/31/2012		66,000
Cash, 12/31/2013		$ 85,000

Indirect method:

Rowe Publishing Company Statement of Cash Flows For the Year Ended December 31, 2013
Cash flows from operating activities:
Net income		$69,000
Adjustments to reconcile net income to net cash flow from operating activities:
Depreciation expense	$ 15,000
Increase in accounts receivable	(9,000)
Increase in inventory	(20,000)
Increase in accounts payable	12,000
Increase in salaries payable	4,000
Decrease in income taxes payable	(7,000)	(5,000)
Net cash provided by operating activities			$ 64,000
Cash flows from investing activities:
Equipment purchase		($ 25,000)
Net cash used for investing activities			(25,000)
Cash flows from financing activities:
Repayment of notes payable		($ 35,000)
Proceeds from issuance of bonds payable		50,000
Payment of dividends		(35,000)
Net cash used for financing activities			(20,000)
Net increase (decrease) in cash			$ 19,000
Cash, January 1, 2013			66,000
Cash, December 31, 2013			$ 85,000

The balance sheets for Byron Manufacturing at December 31, 2012 and 2013 are shown:

Byron Manufacturing Balance Sheets As of December 31, 2013 and 2012
Assets	2013	2012
Current assets:
Cash	5,430	9,400
Accounts receivable	10,650	8,990
Inventory	19,800	18,700
Total current assets	35,880	37,090
Property, plant, and equipment
Building	499,000	499,000
Equipment	276,000	272,100
	775,000	771,100
Accumulated depreciation	(148,850)	(119,100)
Net property, plant, and equipment	626,150	652,000
Total assets	662,030	689,090
Liabilities and Equity
Current liabilities:
Accounts payable	55,470	36,300
Salaries payable	9,660	11,900
Income taxes payable	1,020	9,930
Total current liabilities	66,150	58,130
Long-term liabilities:
Bonds payable	355,000	395,000
Equity:
Common stock	182,000	145,000
Retained earnings	58,880	90,960
Total equity	240,880	235,960
Total liabilities and equity	662,030	689,090

Additional Information needed to prepare the Statement of Cash Flows:

Net income was $2,620

Byron paid $34,700 in cash dividends

Byron issued $46,980 in bonds payable for cash

Byron retired $86,980 in bonds with cash

No fixed assets were sold or disposed of during the period

Fill in the table below to prepare the Statement of Cash Flows for Byron Manufacturing. The beginning balance column is taken from the 2012 Balance Sheet and the ending balance column is taken from the 2013 Balance Sheet. The Increase/Decrease columns represent the change in the accounts and will be debits or credits depending on the normal balance in the accounts. Most accounts will have either a debit or a credit. Accounts used in the non-operating sections of the Statement of Cash Flows are analyzed in more detail. Bonds Payable will show an increase and a decrease for the bond issue and retirement and Retained Earnings will increase with net income and decrease for cash dividends paid. The increases and decreases in the balance sheet accounts are increases and decreases in cash depending on the nature of the account. Follow the letters to see how the increase or decrease affects cash on the statement of cash flows. Click here for help with how changes in balance sheet accounts affect cash.

If an amount box does not require an entry, leave it blank or enter "0".

For the Year Ended December 31, 2013 Beginning Increase/Decrease Ending Balance Sheet Accounts Balance Debit Credit Balance as 8,990 (h) 10,650 19,800 499,000 276,000 (c) 148,850 55,470 9,660 1,020 (d) 355,000 182,000 58,880 1,660 Accounts receivable Inventory Building Equipment Accumulated depreciation Accounts payable Salaries payable Income taxes payable Bonds payable Common stock Retained earnings 18,700 (i) 499,000 272,100 (b) 119,100 36,300 9,170 i) 11,900 (k) 9,930 () 395,000 (e) 145,000 90,960 8,910 37,000 (f) Increase/Decrease in Cash Statement of Cash Flows Debit Credit Cash flow from operating activities Net income Adjustments to reconcile net income to net cash fiow from operating activities Depreciation expens Increase in accounts receivable Increase in inventory Increase in accounts payable Decrease in salaries payable Decrease in income taxes payable 1,660 (h) 19,170 8,910 (I) Cash flows from investing activities Purchase equipment Cash flows from financing activities Issued bonds payable Retired bonds payable Issued common stock 37,000