Exercise 17-8 Here are comparative balance sheets for Velo Company. VELO COMPANY Comparative Balance Sheets December 31 Assets 2014 2013 Cash $62,900 $22,330 Accounts receivable 86,330 75,710 Inventory 169,830 189,430 Land 75,090 101,090 Equipment 269,160 199,090 Accumulated depreciationequipment (65,780 ) (32,400 ) Total $597,530 $555,250 Liabilities and Stockholders Equity Accounts payable $39,340 $47,310 Bonds payable 150,780 203,490 Common stock ($1 par) 214,580 175,280 Retained earnings 192,830 129,170 Total $597,530 $555,250 Additional information: 1. Net income for 2014 was $94,880. 2. Cash dividends of $31,220 were declared and paid. 3. Bonds payable amounting to $52,710 were redeemed for cash $52,710. 4. Common stock was issued for $39,300 cash. 5. No equipment was sold during 2014, but land was sold at cost. Prepare a statement of cash flows for 2014 using the indirect method. (Show amounts that decrease cash flow with either a - sign e.g. -15,000, or in parenthesis e.g. (15,000).) VELO COMPANY Statement of Cash Flows For the Year Ended December 31, 2014 Cash at Beginning of PeriodCash at End of PeriodCash Flows from Financing ActivitiesCash Flows from Investing ActivitiesCash Flows from Operating ActivitiesNet Cash Provided by Financing ActivitiesNet Cash Provided by Investing ActivitiesNet Cash Provided by Operating ActivitiesNet Cash used by Financing ActivitiesNet Cash used by Investing ActivitiesNet Cash used by Operating ActivitiesNet Decrease in CashNet Increase in Cash Net Income Increase in Accounts Payable Depreciation Expense Increase in Inventory Issuance of Common Stock Decrease in Inventory Increase in Accounts Receivable Decrease in Accounts Receivable Payment of Cash Dividends Decrease in Accounts Payable Redemption of Bonds Purchase of Equipment Sale of Land $ Adjustments to reconcile net income to Cash at Beginning of PeriodCash at End of PeriodCash Flows from Financing ActivitiesCash Flows from Investing ActivitiesCash Flows from Operating ActivitiesNet Cash Provided by Financing ActivitiesNet Cash Provided by Investing ActivitiesNet Cash Provided by Operating ActivitiesNet Cash used by Financing ActivitiesNet Cash used by Investing ActivitiesNet Cash used by Operating ActivitiesNet Decrease in CashNet Increase in Cash Decrease in Accounts Payable Payment of Cash Dividends Redemption of Bonds Net Income Increase in Accounts Receivable Decrease in Accounts Receivable Increase in Accounts Payable Issuance of Common Stock Sale of Land Depreciation Expense Purchase of Equipment Decrease in Inventory Increase in Inventory $ Issuance of Common Stock Decrease in Inventory Increase in Inventory Decrease in Accounts Receivable Sale of Land Decrease in Accounts Payable Redemption of Bonds Increase in Accounts Payable Depreciation Expense Purchase of Equipment Payment of Cash Dividends Net Income Increase in Accounts Receivable Increase in Inventory Net Income Decrease in Accounts Receivable Increase in Accounts Payable Depreciation Expense Payment of Cash Dividends Redemption of Bonds Sale of Land Decrease in Accounts Payable Purchase of Equipment Decrease in Inventory Increase in Accounts Receivable Issuance of Common Stock Increase in Inventory Increase in Accounts Receivable Sale of Land Decrease in Accounts Receivable Purchase of Equipment Decrease in Accounts Payable Payment of Cash Dividends Redemption of Bonds Net Income Issuance of Common Stock Depreciation Expense Decrease in Inventory Increase in Accounts Payable Cash at Beginning of Period Cash at End of Period Cash Flows from Financing Activities Cash Flows from Investing Activities Cash Flows from Operating Activities Net Cash Provided by Financing Activities Net Cash Provided by Investing Activities Net Cash Provided by Operating Activities Net Cash used by Financing Activities Net Cash used by Investing Activities Net Cash used by Operating Activities Net Decrease in Cash Net Increase in Cash Cash at Beginning of PeriodCash at End of PeriodCash Flows from Financing ActivitiesCash Flows from Investing ActivitiesCash Flows from Operating ActivitiesNet Cash Provided by Financing ActivitiesNet Cash Provided by Investing ActivitiesNet Cash Provided by Operating ActivitiesNet Cash used by Financing ActivitiesNet Cash used by Investing ActivitiesNet Cash used by Operating ActivitiesNet Decrease in CashNet Increase in Cash Decrease in Accounts Receivable Depreciation Expense Payment of Cash Dividends Decrease in Inventory Decrease in Accounts Payable Increase in Accounts Payable Sale of Land Purchase of Equipment Increase in Inventory Increase in Accounts Receivable Issuance of Common Stock Redemption of Bonds Net Income Decrease in Accounts Receivable Sale of Land Increase in Accounts Payable Increase in Accounts Receivable Decrease in Inventory Purchase of Equipment Decrease in Accounts Payable Issuance of Common Stock Payment of Cash Dividends Depreciation Expense Redemption of Bonds Net Income Increase in Inventory Cash at Beginning of Period Cash at End of Period Cash Flows from Financing Activities Cash Flows from Investing Activities Cash Flows from Operating Activities Net Cash Provided by Financing Activities Net Cash Provided by Investing Activities Net Cash Provided by Operating Activities Net Cash used by Financing Activities Net Cash used by Investing Activities Net Cash used by Operating Activities Net Decrease in Cash Net Increase in Cash Cash at Beginning of PeriodCash at End of PeriodCash Flows from Financing ActivitiesCash Flows from Investing ActivitiesCash Flows from Operating ActivitiesNet Cash Provided by Financing ActivitiesNet Cash Provided by Investing ActivitiesNet Cash Provided by Operating ActivitiesNet Cash used by Financing ActivitiesNet Cash used by Investing ActivitiesNet Cash used by Operating ActivitiesNet Decrease in CashNet Increase in Cash Decrease in Inventory Purchase of Equipment Depreciation Expense Net Income Sale of Land Decrease in Accounts Payable Decrease in Accounts Receivable Issuance of Common Stock Increase in Accounts Payable Payment of Cash Dividends Redemption of Bonds Increase in Inventory Increase in Accounts Receivable Purchase of Equipment Decrease in Accounts Receivable Issuance of Common Stock Decrease in Accounts Payable Sale of Land Increase in Accounts Payable Decrease in Inventory Increase in Accounts Receivable Payment of Cash Dividends Redemption of Bonds Net Income Depreciation Expense Increase in Inventory Purchase of Equipment Decrease in Accounts Payable Increase in Accounts Receivable Issuance of Common Stock Net Income Decrease in Accounts Receivable Payment of Cash Dividends Redemption of Bonds Depreciation Expense Increase in Inventory Decrease in Inventory Increase in Accounts Payable Sale of Land Cash at Beginning of Period Cash at End of Period Cash Flows from Financing Activities Cash Flows from Investing Activities Cash Flows from Operating Activities Net Cash Provided by Financing Activities Net Cash Provided by Investing Activities Net Cash Provided by Operating Activities Net Cash used by Financing Activities Net Cash used by Investing Activities Net Cash used by Operating Activities Net Decrease in Cash Net Increase in Cash Cash at Beginning of PeriodCash at End of PeriodCash Flows from Financing ActivitiesCash Flows from Investing ActivitiesCash Flows from Operating ActivitiesNet Cash Provided by Financing ActivitiesNet Cash Provided by Investing ActivitiesNet Cash Provided by Operating ActivitiesNet Cash used by Financing ActivitiesNet Cash used by Investing ActivitiesNet Cash used by Operating ActivitiesNet Decrease in CashNet Increase in Cash Cash at Beginning of PeriodCash at End of PeriodCash Flows from Financing ActivitiesCash Flows from Investing ActivitiesCash Flows from Operating ActivitiesNet Cash Provided by Financing ActivitiesNet Cash Provided by Investing ActivitiesNet Cash Provided by Operating ActivitiesNet Cash used by Financing ActivitiesNet Cash used by Investing ActivitiesNet Cash used by Operating ActivitiesNet Decrease in CashNet Increase in Cash Cash at Beginning of PeriodCash at End of PeriodCash Flows from Financing ActivitiesCash Flows from Investing ActivitiesCash Flows from Operating ActivitiesNet Cash Provided by Financing ActivitiesNet Cash Provided by Investing ActivitiesNet Cash Provided by Operating ActivitiesNet Cash used by Financing ActivitiesNet Cash used by Investing ActivitiesNet Cash used by Operating ActivitiesNet Decrease in CashNet Increase in Cash $