Exercise 23-12

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		$1,808			$1,098
Receivables		1,744			1,290
Inventory		1,590			1,904
Plant assets		1,903			1,701
Accumulated depreciation		(1,196	)		(1,170	)
Long-term investments (held-to-maturity)		1,293			1,462
		$7,142			$6,285
Accounts payable		$1,203			$783
Accrued liabilities		218			248
Bonds payable		1,413			1,640
Capital stock		1,902			1,690
Retained earnings		2,406			1,924
		$7,142			$6,285

PAT METHENY COMPANY INCOME STATEMENT FOR THE YEAR ENDED DECEMBER 31, 2014
Sales revenue		$6,852
Cost of goods sold		4,707
Gross margin		2,145
Selling and administrative expenses		939
Income from operations		1,206
Other revenues and gains
Gain on sale of investments		89
Income before tax		1,295
Income tax expense		549
Net income		$746
Cash dividends		264
Income retained in business		$482

Additional information: During the year, $65 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 direct method. (Show amounts that decrease cash flow with either a - sign e.g. -25,000 or in parenthesis e.g. (25,000).)

PAT METHENY COMPANY Statement of Cash Flows For the Year Ended December 31, 2014 (Direct Method)