give the reason for your evaluation. P12-713. (Learning Objectives 2, 3: Prepare the statement of cash flows-indirect method) The 2014 and 2013 comparative balance sheets and 2014 income statement of Sommar Medical Supply Corp. follow: Sommar Medical Supply Corp. Comparative Balance Sheets December 31, 2014 2013 Increase (Decrease) $ $ 5 50,700 64,000 65,200 1,000 15,200 60,000 53.200 2,500 $ 35,500 4,000 12,000 (1,500 48,400 66,100 $ 295,400 32,600 49,100 $ 212,600 15,800 17,000 $ 82,800 Current assets: Cash and cash equivalents Accounts receivable 7 Inventories Prepaid expenses 9 Plant assets: 10 Land 11 Equipment, net 12 Total assets 13 Current liabilities: 14 Accounts payable 15 Salary payable 16 Other accrued liabilities 17 Long-term liabilities: 18 Notes payable 19 Stockholders' equity: 20 Common stock, no-par 21 Retained earnings 22 Total liabilities and stockholders' equity 23 $ $ $ 35,400 32,000 22,800 26,000 36,500 24,100 9,400 (4,500) (1.300) 58,000 30,000 28,000 83,200 64,000 $ 295,400 69,000 27,000 $ 212,600 14,200 37000 $ 82.800 $ 571,000 Sommar Medical Supply Corp. Income Statement Year Ended December 31, 2014 Revenues: Sales revenue 4 Expenses: 5 Cost of goods sold 6 Salary expense Depreciation expense Other operating expense Interest expense Income tax expense 11 Total expenses 12 Net income 13 7 $ 248,300 94,900 15,000 57,200 24,800 39.100 $ 479,300 91.700 Sommar Medical Supply had no noncash investing and financing transactions during 2014 During the year, there were no sales of land or equipment, no payment of notes payable, no retirements of stock, and no treasury stock transactions. Requirements 1. Prepare the 2014 statement of cash flows, formatting operating activities by using the indirect method. 2. How will what you learned in this problem help you evaluate an investment