P4-52

lg the Csil etated by its operations? Explain. aring a Statement of Cash Flows (Indirect Method) be 452 ainbow Company's income statement and comparative balance sheets follow. RAINBOW COMPANY Income Statement For Year Ended December 31, 2013 Sales . Dividend income Total revenue... Cost of goods sold . . . . Wages and other operating expenses . Depreciation expense Patent amortisation expense.. Interest expense $750,000 15,000 765,000 $440,000 130,000 39,000 7,000 13,000 44,000 5,000 . .. .. . me tax expense . 675,000 $ 90,000 RAINBOW COMPANY Balance Sheets Dec. 31, 2013 Dec. 31, 2012 Assets Cash and cash equivalents... Accounts receivable Inventory .. Prepaid expenses.. $ 25,000 30,000 77,000 6,000 57,000 100,000 350,000 (75,000) 225,000 (46,000) 32,000 $781,000 $19,000 40,000 103,000 10,000 190,000 445,000 (91,000) 179,000 (42,000) 50,000 Land Buildings $903,000 Liabilities and Stockholders' Equity 20,000 6,000 8,000 155,000 100,000 379,000 133,000 102,000 5,000 10,000 125,000 75,000 364,000 124,000 62,000 Interest payable .. . Share capital ($5 par value) Contributed surplus $903,000 $781,000 Total liabilities and equity