June 30, 2014, and Statement of Cash Flows: Indirect Method s income statement for the year ended ) P7. Reed Corpo compa ration's income statement for the year ende Reed Corporation Income Statement For the Year Ended June 30, 2014 tive balance sheets as of June 30, 2014 and 2013, follow ra $8.081,800 7,312,600 769,200 Sales Cost of goods sold Gross margin Operating expenses (including depreciation 378,400 S 390,800 expense of $120,000) Income from operations Other income (expenses Loss on sale of equipment Interest expense Income before income taxes Income taxes expense Net income s (8,000) 75.200) (83,200) S 307,600 68,400 239,200 Reed Corporation Comparative Balance Sheets June 30, 2014 and 2013 2014 2013 Assets 334.000 200,000 360,000 1,200 1,256,000 S 40,000 240,000 440,000 2,000 Accounts receivable (net) Prepaid expenses Property, plant and equipment Total assets $1.785.200 1.546.000 Liabilities and Stockholders Equity Accounts payable Notes payable (due in 90 days) Income taxes payable Mortgage payable Common stock, $5 par value Retained earnings Total liabilities and stockholders' equity S 128,000 60,000 52.000 720,000 84.000 160.000 36,000 560,000 400,000 306.000 $1,546,000 425,200 $1,785,200 $ During 2014, the corporation sold at a loss of $8.000 equipment that cost $48,0 on which it had accumulated depreciation of $34,000. It also purchased land and a building for $200,000 through an increase of $200,000 in Mortgage ayal S40,000 payment on the mortgage; repaid $160,000 in notes but borrowe tional $60,000 through the issuance of a new note payable; and $120,000 cash dividend. addi declared REQUIRED 1. Using the indirect method, prepare a statement of cash flows. Include 2. ACCOUNTING CONNECTION What are the primary reasons tor 3. BUSINESS APPLICATIONCompute and assess cash flow yield and schedule of noncash investing and financing transactions. increase in cash from 2013 to 2014: for 2014, (Round to one decimal place.) How would you assess the cash-gencrating ability