GORNI COMPANY

Comparative Balance Sheet

December 31

20142013

Assets

Cash$70,000$35,000

Accounts receivable82,00053,000

Inventories120,000132,000

Prepaid expenses19,00025,000

Investments80,00065,000

Plant assets310,000250,000

Accumulated depreciation(65,000)(60,000)

Total$616,000$500,000

Liabilities and Stockholders' Equity

Accounts payable$85,000$75,000

Accrued expenses payable22,00024,000

Bonds payable130,000150,000

Common stock245,000170,000

Retained earnings134,00081,000

Total$616,000$500,000

GORNI COMPANY

Income Statement

For Year Ended December 31, 2014

Sales$480,000

Less:

Cost of goods sold$290,000

Operating expenses (excluding depreciation)60,000

Depreciation expense17,000

Income taxes15,000

Interest expense13,000

Loss on disposal of plant assets8,000403,000

Net income$77,000

Additional information:

1.New plant assets costing $85,000 were purchased for cash in 2014.

2.Old plant assets costing $25,000 were sold for $5,000 cash when book value was $13,000.

3.Bonds with a face value of $20,000 were converted into $20,000 of common stock.

4.A cash dividend of $24,000 was declared and paid during the year.

Instructions: Prepare the statement of cash flows for the year using the indirect method.