eBook Learning Objective 2 Problem-Solving Strategy Statement of Cash FlowsIndirect Method The comparative balance sheet of Amelia Enterprises, Inc. at December 31, 2014 and 2013, is as follows: Dec. 31, 2014 Dec. 31, 2013 Assets Cash $55,410 $68,250 Accounts receivable (net) 85,140 92,010 Merchandise inventory 121,610 114,040 Prepaid expenses 4,950 3,460 Equipment 247,750 204,330 Accumulated depreciation-equipment (64,410) (50,110) Total $450,450 $431,980 Liabilities and Stockholders' Equity Accounts payable (merchandise creditors) $94,590 $90,280 Mortgage note payable 0 129,590 Common stock, $1 par 14,000 9,000 Paid-in capital in excess of par-common stock 197,000 122,000 Retained earnings 144,860 81,110 Total $450,450 $431,980 Additional data obtained from the income statement and from an examination of the accounts in the ledger for 2014 are as follows: Net income, $163,200. Depreciation reported on the income statement, $31,260. Equipment was purchased at a cost of $60,380, and fully depreciated equipment costing $16,960 was discarded, with no salvage realized. The mortgage note payable was not due until 2016, but the terms permitted earlier payment without penalty. 5,000 shares of common stock were issued at $16 for cash. Cash dividends declared and paid, $99,450. Required: Hide Hint(s) Prepare a statement of cash flows, using the indirect method of presenting cash flows from operating activities. Use the minus sign to indicate cash out flows, cash payments, decreases in cash and for any adjustments, if required. Amelia Enterprises, Inc. Statement of Cash Flows For the Year Ended December 31, 2014 Cash flows from operating activities: Net income $ 163200 Adjustments to reconcile net income to net cash flow from operating activities: Depreciation 31260 Changes in current operating assets and liabilities: Decrease in accounts receivable 6870 Increase in merchandise inventory 7570 Increase in prepaid expenses 1490 Increase in accounts payable 4310 Net cash flow from operating activities $ 196580 Cash flows from investing activities: Cash paid for equipment $ 60380 Net cash flow used for investing activities 60380 Cash flows from financing activities: Cash received from depreciation $ 129590 Less cash paid for common stock $ 80000 Net cash flow used in financing activities 12840 Decrease in cash $ 12840 Cash at beginning of the year 68250 Cash at end of the year $ 55410