P12-5 (Supplement B) Preparing a Statement of Cash Flows with Gain on Sale of Equipment (indirect Method) L012-2, 12-4, 12-6 XS Supply Company is developing its annual financial statements at December 31, 2014. The statements are completeexcept for the statement of cash flows. The completed comparative balance sheets and income statement are summarized: 2013 2014 Balance sheet at December 31 34,000 Cash 29,000 Accounts receivable 35,000 28,000 Merchandise inventory 38,000 41,000 Property and equipment 100,000 121,000 Less: Accumulated depreciation 30,000 25,000 201,000 S 170,000 36,000 27,000 Accounts payable Wages payable 1,200 1,400 Note payable, long-term 38,000 44,000 Contributed capital 88,600 72,600 Retained earnings 37,200 25,000 170,000 201,000 Income statement for 2014 120,000 Sales Gain on sale of equipment 1,000 Cost of goods sold 70,000 Other expenses 38,800