Exercise 23-11

Condensed financial data of Pat Metheny Company for 2014 and 2013 are presented below.

PAT METHENY COMPANY COMPARATIVE BALANCE SHEET AS OF DECEMBER 31, 2014 AND 2013
		2014			2013
Cash		$1,810			$1,098
Receivables		1,746			1,310
Inventory		1,589			1,906
Plant assets		1,896			1,699
Accumulated depreciation		(1,204	)		(1,168	)
Long-term investments (held-to-maturity)		1,290			1,476
		$7,127			$6,321
Accounts payable		$1,206			$785
Accrued liabilities		213			246
Bonds payable		1,420			1,633
Capital stock		1,902			1,705
Retained earnings		2,386			1,952
		$7,127			$6,321

PAT METHENY COMPANY INCOME STATEMENT FOR THE YEAR ENDED DECEMBER 31, 2014
Sales revenue		$6,794
Cost of goods sold		4,705
Gross margin		2,089
Selling and administrative expenses		935
Income from operations		1,154
Other revenues and gains
Gain on sale of investments		89
Income before tax		1,243
Income tax expense		544
Net income		$699
Cash dividends		265
Income retained in business		$434

Additional information: During the year, $77 of common stock was issued in exchange for plant assets. No plant assets were sold in 2014. Prepare a statement of cash flows 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).)

PAT METHENY COMPANY Statement of Cash Flows For the Year Ended December 31, 2014 (Indirect Method) Adjustments to reconcile net income to