Michaels Company had the following information available at the end of 2014. MICHAELS COMPANY COMPARATIVE BALANCE SHEETS AS OF DECEMBER 31, 2014 AND 2013 2014 2013 Cash $10,280 $3,900 Accounts receivable 21,400 13,460 Short-term investments 21,730 31,790 Inventory 41,060 36,690 Prepaid rent 2,870 13,640 Prepaid insurance 2,620 960 Supplies 1,110 770 Land 124,150 173,340 Buildings 350,360 350,360 Accumulated depreciationbuildings (105,600 ) (87,930 ) Equipment 524,980 400,180 Accumulated depreciationequipment (130,330 ) (113,460 ) Patents 45,860 51,360 Total assets $910,490 $875,060 Accounts payable $22,360 $31,620 Income taxes payable 5,400 4,400 Salaries and wages payable 5,060 3,800 Short-term notes payable 10,960 10,960 Long-term notes payable 60,230 70,120 Bonds payable 400,060 400,060 Premium on bonds payable 16,231 26,890 Common stock 240,220 219,580 Paid-in capital in excess of parcommon stock 25,979 18,290 Retained earnings 123,990 89,340 Total liabilities and stockholders equity $910,490 $875,060 MICHAEL S COMPANY INCOME STATEMENT AND DIVIDEND INFORMATION FOR THE YEAR ENDED DECEMBER 31, 2014 Sales revenue $1,160,740 Cost of goods sold 748,320 412,420 Gross margin Operating expenses Selling expenses $79,290 Administrative expenses 156,840 Depreciation/Amortization expense 40,040 Total operating expenses 276,170 Income from operations 136,250 Other revenues/expenses Gain on sale of land 8,220 Gain on sale of short-term investment 4,040 Dividend revenue 2,530 Interest expense (52,360 ) (37,570 ) Income before taxes 98,680 Income tax expense 39,550 Net income 59,130 Dividends to common stockholders (24,480 ) To retained earnings $34,650 Prepare a statement of cash flows for Michaels Company using the direct method accompanied by a reconciliation schedule. Assume the short-term investments are classified as available-for-sale. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).) MICHAELS COMPANY Statement of Cash Flows For the Year Ended December 31, 2014 (Direct Method) Cash, January 1, 2014Cash, December 31, 2014Cash Flows from Financing ActivitiesCash Flows from Investing ActivitiesCash Flows from Operating ActivitiesNet Cash Provided by Financing ActivitiesNet Cash Provided by Investing ActivitiesNet Cash Provided by Operating ActivitiesNet Cash Used by Financing ActivitiesNet Cash Used by Investing ActivitiesNet Cash Used by Operating ActivitiesNet Decrease in CashNet Increase in Cash Cash receipts: Cash Paid to Suppliers Cash Received from Customers Cash Paid for Operating Expenses Interest Paid Sale of Short-Term Investments Purchase of Short-Term Investments Dividends Paid Taxes Paid Sale of Land Purchase of Equipment Purchase of Land Proceeds from Issuance of Common Stock Principal Payment on Long-Term Debt Dividends Received $ Proceeds from Issuance of Common Stock Cash Received from Customers Purchase of Land Cash Paid to Suppliers Purchase of Short-Term Investments Dividends Received Purchase of Equipment Dividends Paid Cash Paid for Operating Expenses Interest Paid Sale of Land Taxes Paid Sale of Short-Term Investments Principal Payment on Long-Term Debt $ Cash payments: Principal Payment on Long-Term Debt Dividends Received Purchase of Land Sale of Short-Term Investments Sale of Land Cash Paid for Operating Expenses Dividends Paid Interest Paid Purchase of Equipment Purchase of Short-Term Investments Cash Received from Customers Taxes Paid Cash Paid to Suppliers Proceeds from Issuance of Common Stock Purchase of Land Cash Received from Customers Principal Payment on Long-Term Debt Dividends Paid Sale of Land Dividends Received Purchase of Short-Term Investments Cash Paid to Suppliers Cash Paid for Operating Expenses Proceeds from Issuance of Common Stock Sale of Short-Term Investments Taxes Paid Interest Paid Purchase of Equipment Cash Paid for Operating Expenses Dividends Received Proceeds from Issuance of Common Stock Principal Payment on Long-Term Debt Interest Paid Cash Paid to Suppliers Dividends Paid Purchase of Land Taxes Paid Purchase of Equipment Purchase of Short-Term Investments Cash Received from Customers Sale of Short-Term Investments Sale of Land Purchase of Land Cash Received from Customers Dividends Received Purchase of Equipment Dividends Paid Purchase of Short-Term Investments Cash Paid for Operating Expenses Taxes Paid Interest Paid Cash Paid to Suppliers Sale of Short-Term Investments Sale of Land Proceeds from Issuance of Common Stock Principal Payment on Long-Term Debt Cash, January 1, 2014Cash, December 31, 2014Cash Flows from Financing ActivitiesCash Flows from Investing ActivitiesCash Flows from Operating ActivitiesNet Cash Provided by Financing ActivitiesNet Cash Provided by Investing ActivitiesNet Cash Provided by Operating ActivitiesNet Cash Used by Financing ActivitiesNet Cash Used by Investing ActivitiesNet Cash Used by Operating ActivitiesNet Decrease in CashNet Increase in Cash $ Cash, January 1, 2014Cash, December 31, 2014Cash Flows from Financing ActivitiesCash Flows from Investing ActivitiesCash Flows from Operating ActivitiesNet Cash Provided by Financing ActivitiesNet Cash Provided by Investing ActivitiesNet Cash Provided by Operating ActivitiesNet Cash Used by Financing ActivitiesNet Cash Used by Investing ActivitiesNet Cash Used by Operating ActivitiesNet Decrease in CashNet Increase in Cash Sale of Land Sale of Short-Term Investments Cash Received from Customers Proceeds from Issuance of Common Stock Principal Payment on Long-Term Debt Dividends Paid Purchase of Equipment Purchase of Land Purchase of Short-Term Investments Taxes Paid Dividends Received Interest Paid Cash Paid to Suppliers Cash Paid for Operating Expenses Dividends Paid Cash Paid for Operating Expenses Taxes Paid Sale of Land Purchase of Land Purchase of Short-Term Investments Purchase of Equipment Principal Payment on Long-Term Debt Interest Paid Sale of Short-Term Investments Cash Paid to Suppliers Proceeds from Issuance of Common Stock Cash Received from Customers Dividends Received Cash Paid for Operating Expenses Sale of Land Sale of Short-Term Investments Purchase of Equipment Interest Paid Principal Payment on Long-Term Debt Cash Paid to Suppliers Proceeds from Issuance of Common Stock Purchase of Land Dividends Paid Purchase of Short-Term Investments Cash Received from Customers Taxes Paid Dividends Received Cash, January 1, 2014 Cash, December 31, 2014 Cash Flows from Financing Activities Cash Flows from Investing Activities Cash Flows from Operating Activities Net Cash Provided by Financing Activities Net Cash Provided by Investing Activities Net Cash Provided by Operating Activities Net Cash Used by Financing Activities Net Cash Used by Investing Activities Net Cash Used by Operating Activities Net Decrease in Cash Net Increase in Cash Cash, January 1, 2014Cash, December 31, 2014Cash Flows from Financing ActivitiesCash Flows from Investing ActivitiesCash Flows from Operating ActivitiesNet Cash Provided by Financing ActivitiesNet Cash Provided by Investing ActivitiesNet Cash Provided by Operating ActivitiesNet Cash Used by Financing ActivitiesNet Cash Used by Investing ActivitiesNet Cash Used by Operating ActivitiesNet Decrease in CashNet Increase in Cash Dividends Paid Sale of Land Purchase of Land Taxes Paid Proceeds from Issuance of Common Stock Principal Payment on Long-Term Debt Cash Received from Customers Purchase of Short-Term Investments Dividends Received Cash Paid to Suppliers Cash Paid for Operating Expenses Interest Paid Sale of Short-Term Investments Purchase of Equipment Interest Paid Principal Payment on Long-Term Debt Proceeds from Issuance of Common Stock Sale of Land Cash Paid to Suppliers Purchase of Equipment Dividends Paid Dividends Received Purchase of Land Purchase of Short-Term Investments Cash Paid for Operating Expenses Sale of Short-Term Investments Cash Received from Customers Taxes Paid Sale of Short-Term Investments Cash Paid to Suppliers Taxes Paid Sale of Land Purchase of Short-Term Investments Cash Paid for Operating Expenses Interest Paid Proceeds from Issuance of Common Stock Purchase of Equipment Principal Payment on Long-Term Debt Dividends Paid Cash Received from Customers Dividends Received Purchase of Land Cash, January 1, 2014 Cash, December 31, 2014 Cash Flows from Financing Activities Cash Flows from Investing Activities Cash Flows from Operating Activities Net Cash Provided by Financing Activities Net Cash Provided by Investing Activities Net Cash Provided by Operating Activities Net Cash Used by Financing Activities Net Cash Used by Investing Activities Net Cash Used by Operating Activities Net Decrease in Cash Net Increase in Cash Cash, January 1, 2014Cash, December 31, 2014Cash Flows from Financing ActivitiesCash Flows from Investing ActivitiesCash Flows from Operating ActivitiesNet Cash Provided by Financing ActivitiesNet Cash Provided by Investing ActivitiesNet Cash Provided by Operating ActivitiesNet Cash Used by Financing ActivitiesNet Cash Used by Investing ActivitiesNet Cash Used by Operating ActivitiesNet Decrease in CashNet Increase in Cash Cash, January 1, 2014Cash, December 31, 2014Cash Flows from Financing ActivitiesCash Flows from Investing ActivitiesCash Flows from Operating ActivitiesNet Cash Provided by Financing ActivitiesNet Cash Provided by Investing ActivitiesNet Cash Provided by Operating ActivitiesNet Cash Used by Financing ActivitiesNet Cash Used by Investing ActivitiesNet Cash Used by Operating ActivitiesNet Decrease in CashNet Increase in Cash Cash, January 1, 2014Cash, December 31, 2014Cash Flows from Financing ActivitiesCash Flows from Investing ActivitiesCash Flows from Operating ActivitiesNet Cash Provided by Financing ActivitiesNet Cash Provided by Investing ActivitiesNet Cash Provided by Operating ActivitiesNet Cash Used by Financing ActivitiesNet Cash Used by Investing ActivitiesNet Cash Used by Operating ActivitiesNet Decrease in CashNet Increase in Cash $ Reconciliation Schedule Reconciliation of Net Income to Cash, January 1, 2014Cash, December 31, 2014Cash Flows from Financing ActivitiesCash Flows from Investing ActivitiesCash Flows from Operating ActivitiesNet Cash Provided by Financing ActivitiesNet Cash Provided by Investing ActivitiesNet Cash Provided by Operating ActivitiesNet Cash Used by Financing ActivitiesNet Cash Used by Investing ActivitiesNet Cash Used by Operating ActivitiesNet Decrease in CashNet Increase in CashTotal Adjustments Increase in Salaries and Wages Payable Increase in Supplies Depreciation/Amortization Expense Loss on Sale of Short-Term Investments Increase in Accounts Payable Decrease in Prepaid Rent Increase in Prepaid Rent Net Income Increase in Income Taxes Payable Decrease in Accounts Payable Decrease in Prepaid Insurance Decrease in Income Taxes Payable Increase in Accounts Receivable Gain on Sale of Land Decrease in Accounts Receivable Loss on Sale of Land Decrease in Salaries and Wages Payable Gain on Sale of Short-Term Investments Amortization of Bond Premium Increase in Inventory Decrease in Inventory Increase in Prepaid Insurance Decrease in Supplies $ Adjustments to reconcile net income to Cash, January 1, 2014Cash, December 31, 2014Cash Flows from Financing ActivitiesCash Flows from Investing ActivitiesCash Flows from Operating ActivitiesNet Cash Provided by Financing ActivitiesNet Cash Provided by Investing ActivitiesNet Cash Provided by Operating ActivitiesNet Cash Used by Financing ActivitiesNet Cash Used by Investing ActivitiesNet Cash Used by Operating ActivitiesNet Decrease in CashNet Increase in CashTotal Adjustments Decrease in Prepaid Rent Loss on Sale of Short-Term Investments Decrease in Accounts Receivable Amortization of Bond Premium Increase in Prepaid Rent Increase in Salaries and Wages Payable Net Income Decrease in Salaries and Wages Payable Depreciation/Amortization Expense Increase in Accounts Payable Increase in Prepaid Insurance Decrease in Prepaid Insurance Increase in Supplies Increase in Income Taxes Payable Decrease in Supplies Decrease in Income Taxes Payable Gain on Sale of Land Decrease in Inventory Loss on Sale of Land Gain on Sale of Short-Term Investments Decrease in Accounts Payable Increase in Accounts Receivable Increase in Inventory $ Gain on Sale of Land Decrease in Accounts Payable Increase in Accounts Receivable Increase in Prepaid Rent Increase in Salaries and Wages Payable Increase in Inventory Loss on Sale of Short-Term Investments Gain on Sale of Short-Term Investments Decrease in Accounts Receivable Increase in Prepaid Insurance Decrease in Inventory Decrease in Income Taxes Payable Increase in Income Taxes Payable Amortization of Bond Premium Decrease in Prepaid Insurance Decrease in Prepaid Rent Decrease in Supplies Decrease in Salaries and Wages Payable Increase in Supplies Net Income Loss on Sale of Land Depreciation/Amortization Expense Increase in Accounts Payable Increase in Prepaid Rent Depreciation/Amortization Expense Decrease in Prepaid Rent Increase in Salaries and Wages Payable Gain on Sale of Short-Term Investments Decrease in Inventory Loss on Sale of Short-Term Investments Amortization of Bond Premium Increase in Accounts Payable Decrease in Salaries and Wages Payable Decrease in Prepaid Insurance Net Income Increase in Accounts Receivable Decrease in Accounts Payable Decrease in Supplies Decrease in Accounts Receivable Decrease in Income Taxes Payable Increase in Inventory Increase in Prepaid Insurance Increase in Income Taxes Payable Increase in Supplies Gain on Sale of Land Loss on Sale of Land Decrease in Accounts Receivable Gain on Sale of Land Increase in Prepaid Rent Increase in Accounts Payable Decrease in Prepaid Insurance Increase in Inventory Increase in Income Taxes Payable Decrease in Prepaid Rent Net Income Loss on Sale of Land Decrease in Salaries and Wages Payable Amortization of Bond Premium Decrease in Accounts Payable Depreciation/Amortization Expense Increase in Accounts Receivable Decrease in Income Taxes Payable Increase in Salaries and Wages Payable Gain on Sale of Short-Term Investments Loss on Sale of Short-Term Investments Increase in Prepaid Insurance Increase in Supplies Decrease in Supplies Decrease in Inventory Gain on Sale of Land Increase in Prepaid Rent Decrease in Accounts Payable Amortization of Bond Premium Decrease in Salaries and Wages Payable Decrease in Supplies Depreciation/Amortization Expense Increase in Income Taxes Payable Loss on Sale of Land Decrease in Income Taxes Payable Decrease in Prepaid Insurance Increase in Accounts Payable Increase in Supplies Gain on Sale of Short-Term Investments Increase in Inventory Decrease in Inventory Increase in Salaries and Wages Payable Increase in Accounts Receivable Net Income Increase in Prepaid Insurance Loss on Sale of Short-Term Investments Decrease in Prepaid Rent Decrease in Accounts Receivable Gain on Sale of Land Increase in Supplies Depreciation/Amortization Expense Decrease in Prepaid Insurance Increase in Accounts Receivable Net Income Loss on Sale of Land Decrease in Accounts Payable Decrease in Accounts Receivable Loss on Sale of Short-Term Investments Increase in Prepaid Insurance Gain on Sale of Short-Term Investments Increase in Salaries and Wages Payable Decrease in Prepaid Rent Increase in Accounts Payable Increase in Inventory Increase in Prepaid Rent Increase in Income Taxes Payable Decrease in Inventory Decrease in Income Taxes Payable Decrease in Salaries and Wages Payable Decrease in Supplies Amortization of Bond Premium Increase in Accounts Payable Net Income Decrease in Prepaid Rent Increase in Prepaid Rent Decrease in Supplies Decrease in Accounts Payable Decrease in Inventory Gain on Sale of Short-Term Investments Increase in Accounts Receivable Increase in Income Taxes Payable Gain on Sale of Land Decrease in Income Taxes Payable Decrease in Accounts Receivable Depreciation/Amortization Expense Decrease in Salaries and Wages Payable Increase in Inventory Loss on Sale of Land Increase in Salaries and Wages Payable Loss on Sale of Short-Term Investments Increase in Prepaid Insurance Increase in Supplies Amortization of Bond Premium Decrease in Prepaid Insurance Depreciation/Amortization Expense Loss on Sale of Land Net Income Decrease in Accounts Payable Decrease in Prepaid Rent Increase in Accounts Payable Gain on Sale of Land Increase in Salaries and Wages Payable Increase in Inventory Decrease in Accounts Receivable Gain on Sale of Short-Term Investments Loss on Sale of Short-Term Investments Amortization of Bond Premium Decrease in Inventory Decrease in Supplies Increase in Income Taxes Payable Decrease in Prepaid Insurance Decrease in Salaries and Wages Payable Increase in Accounts Receivable Increase in Prepaid Rent Increase in Prepaid Insurance Decrease in Income Taxes Payable Increase in Supplies Gain on Sale of Short-Term Investments Decrease in Prepaid Rent Decrease in Supplies Increase in Accounts Payable Decrease in Salaries and Wages Payable Increase in Prepaid Insurance Loss on Sale of Short-Term Investments Increase in Prepaid Rent Gain on Sale of Land Decrease in Prepaid Insurance Increase in Supplies Increase in Salaries and Wages Payable Decrease in Accounts Payable Increase in Accounts Receivable Loss on Sale of Land Amortization of Bond Premium Net Income Decrease in Accounts Receivable Depreciation/Amortization Expense Decrease in Income Taxes Payable Increase in Inventory Decrease in Inventory Increase in Income Taxes Payable Decrease in Income Taxes Payable Increase in Salaries and Wages Payable Amortization of Bond Premium Loss on Sale of Land Decrease in Salaries and Wages Payable Increase in Supplies Net Income Increase in Prepaid Insurance Decrease in Supplies Increase in Inventory Decrease in Inventory Decrease in Prepaid Insurance Gain on Sale of Land Decrease in Accounts Payable Increase in Prepaid Rent Increase in Income Taxes Payable Depreciation/Amortization Expense Gain on Sale of Short-Term Investments Increase in Accounts Payable Increase in Accounts Receivable Decrease in Accounts Receivable Decrease in Prepaid Rent Loss on Sale of Short-Term Investments Decrease in Prepaid Rent Increase in Salaries and Wages Payable Increase in Prepaid Rent Increase in Income Taxes Payable Depreciation/Amortization Expense Loss on Sale of Short-Term Investments Gain on Sale of Short-Term Investments Decrease in Income Taxes Payable Decrease in Prepaid Insurance Increase in Accounts Payable Decrease in Salaries and Wages Payable Increase in Prepaid Insurance Increase in Accounts Receivable Increase in Supplies Gain on Sale of Land Decrease in Accounts Receivable Decrease in Supplies Decrease in Accounts Payable Loss on Sale of Land Amortization of Bond Premium Net Income Increase in Inventory Decrease in Inventory Increase in Accounts Receivable Increase in Salaries and Wages Payable Amortization of Bond Premium Decrease in Salaries and Wages Payable Gain on Sale of Land Increase in Prepaid Rent Decrease in Supplies Increase in Income Taxes Payable Decrease in Accounts Payable Increase in Inventory Increase in Accounts Payable Loss on Sale of Land Decrease in Inventory Decrease in Accounts Receivable Decrease in Income Taxes Payable Increase in Prepaid Insurance Gain on Sale of Short-Term Investments Decrease in Prepaid Rent Decrease in Prepaid Insurance Increase in Supplies Net Income Loss on Sale of Short-Term Investments Depreciation/Amortization Expense Cash, January 1, 2014 Cash, December 31, 2014 Cash Flows from Financing Activities Cash Flows from Investing Activities Cash Flows from Operating Activities Net Cash Provided by Financing Activities Net Cash Provided by Investing Activities Net Cash Provided by Operating Activities Net Cash Used by Financing Activities Net Cash Used by Investing Activities Net Cash Used by Operating Activities Net Decrease in Cash Net Increase in Cash Total Adjustments Cash, January 1, 2014 Cash, December 31, 2014 Cash Flows from Financing Activities Cash Flows from Investing Activities Cash Flows from Operating Activities Net Cash Provided by Financing Activities Net Cash Provided by Investing Activities Net Cash Provided by Operating Activities Net Cash Used by Financing Activities Net Cash Used by Investing Activities Net Cash Used by Operating Activities Net Decrease in Cash Net Increase in Cash Total Adjustments $ Click if you would like to Show Work for this question: Open Show Work