Home Free Inc. had the following financial information for 2013. Prepare the statement of cash flows using the indirect method for the operating section. Briefly analyze the statement -- what do you learn from it? Additional information: Old equipment was sold for $1000 cash when the original cost of the equipment sold was $33,600. No new equipment was purchased in 2013. Land was purchased with cash. Assume any new stock was issued for cash. Dividends were paid in Cash. Enter amounts subtracted or cash paid/used as negative amounts. Home Free, Inc. Income Statement For Year Ended December 31, 2013 Revenue: Sales Revenue 275,000 Expenses: Depreciation Expense Salaries Expense Rent Expense Utilities Expense Loss on Sale of Equipment Total Expenses 34,000 99,000 26,000 5,700 600 165,300 Net Income 109,700 Home Free, Inc. Balance Sheet December 31, 2013 Assets: Cash Accounts Receivable Supplies Inventory Total Current Assets 2013 2012 366,950 439,450 85,000 110,000 450 750 82,000 76,000 534,400 626,200 Liabilities & Equity: Accounts Payable Taxes Payable Total Current Liabilities Long Term Notes Payable 2013 12,500 3,650 16,150 2012 17,750 2,300 20,050 39,000 Equipment 78,000 111,600 Less: Accum. Depreciation (63,000) (61,000) Land 140,000 Total Plant Assets 15,000 50,600 Common Stock 160,000 160,000 Paid in capital in excess of par value, common stock 295,000 295,000 Total Paid in Capital 455,000 455,000 Retained Earnings 218,250 162,750 TOTAL ASSETS 689,400 676,800 TOTAL LIABILITIES AND EQUITY 689,400 676,800 For Year Ended December 31, 2013 Cash Flows from Operating Activities: Net Income 109700 Adjustments to reconcile net income to net cash Depreciation Expense 1 34000 Loss on Sale of Equipment 600 Decrease in Accounts Receivable Increase in Inventory Decrease in Supplies Decrease in Accounts Payable Increase in Taxes Payable Total Adjustments Net Cash Provided by Operating Activities Cash Flows from Investing Activities: Cash paid for new land Cash received for old equipment Net Cash Used by Investing Activities Cash Flows from Financing Activities: Cash paid for dividends Cash paid towards note payable Net Cash Used by Financing Activities Net Decrease in Cash Cash Balance, 2012 Cash Balance, 2013