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Statement of cash flow- indirect method 02 (90 min) Group C Problems 16C-1. From the following income statement, balance sheet, and added informa- tion for Empire Company Ltd., prepare a statement of cash flows using the indirect method. Empire Company Ltd. Income Statement For the Year Ended May 31, 2015 Sales $512,520 Cost of Goods Sold 290,140 Gross Profit 222,380 Expenses: Advertising $21,480 Amortization 23,910 Insurance 17,638 Interest 5,030 Miscellaneous 18,400 Rent 36,000 Salaries 63,402 Total Expenses 185,860 Net Income $ 36,520 Empire Company Ltd. Balance Sheet As of May 31, 2015 and 2014 Assets 2015 2014 Current Assets: Cash $ 10,580 $ 8,670 Temporary Investments 50,000 30,000 Accounts Receivable-Net 69,930 58,465 Merchandise Inventory 84,550 61,894 Prepaid Insurance 8,405 7.815 Prepaid Rent 12,000 12,000 Total Current Assets 235,465 178,844 Plant and Equipment: Automotive $ 88,600 $ 72,480 Less: Accum. Amort 39,400 49,200 32,400 40,080 Computers and Related 42,880 37,340 Less: Accum. Amort. 26,200 16,680 17,400 19,940 Store Equipment 146,540 138,620 Less: Accum. Amort. 62,490 84,050 54,380 84,240 Plant and Equipmenttotal 149,930 144,260 Total Assets $385,395 $323,104 Check Figure Net Increase in Cash $21,910 700 CHAPTER 16 Liabilities and Shareholders' Equity Current Liabilities: Bank Loan Payable 22,000 19,400 Accounts Payable 86,386 78,675 Accrued Salaries 2,814 3,465 Current Portion of Auto Loan Payable 10,250 11,840 Total Current Liabilities 121,450 113,380 Long-Term Liability: Automotive Loan-Long-Term Portion 27,425 32,724 Total Liabilities 148,875 146,104 Shareholders' Equity Preferred Shares $6,00 Nonparticipating 120,000 90,000 Common Shares 20,000 15,000 Retained Earnings 96,520 72,000 Total Shareholders' Equity 236,520 177,000 Total Liabilities and Shareholders' Equity $385,395 $323,104 Additional Data: 1. All fixed asset additions were paid by cheque. 2. A dividend of $12,000 was paid in cash during the year. 3. Additional preferred and common shares were sold for cash. 4. There were no disposals of capital assets during the year. 5. The company defines cash as including Temporary Investments. Statement of cash flows-direct method 0 (90 min)