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Use the Gulf Corp. financial statements and supplementary information given below to prepare a statement of cash flows for the year ended December 31, 2014, using the indirect method Additional Information: a. Purchased machinery for $40,000 cash. b. Sold the long-term investment on January 1, 2014 for $14,000. C. Sold machinery for $17,500 cash that had originally cost $61,500 and had $44,000 of accumulated depreciation. d. Issued $59,000 of bonds payable at face value e. The short-term investment is a treasury bill that was purchased with maturity in 90 days. Categories: All Headings & Totals Cash Flows Gulf Corp Comparative Balance Sheet Information December 31 Assets 2014 2013 Cash 304,000 150,000 Short-term investments 116,000 103,000 Accounts receivable 95,300 63,000 Merchandise inventory 73,100 123,000 Long term investment 0 36,000 Machinery 168,500 190,000 Accumulated depreciation (112,000) (120,000) Total assets 644,900 545,000 Choose an Account or Heading Accounts and Headings: Increase in income taxes payable Increase in merchandise inventory Increase in prepaid expenses Increase in salaries payable Increase in unearned revenues Loss on sale of equipment Loss on sale of furniture Loss on sale of long-term investment Loss on sale of machinery Net cash inflow from financing activities Net cash inflow from investing activities Net cash inflow from operating activities Net cash outflow from financing activities Net cash outflow from investing activities Net cash outflow from operating activities Net income Net increase (decrease) in cash Net loss Search: net Erase Cancel X X + Liabilities and Equity Accounts payable Dividends payable Bonds payable Share capital Retained earnings Total liabilities and equity. 108,900 5,000 59,000 293,000 179,000 644,900 66,000 42,000 0 293,000 144,000 545,000 750,000 Gulf Corp. Income Statement For Year Ended December 31, 2014 Sales Cost Of Goods Sold 620,000 Depreciation expense. 36,000 Other expenses. 37,000 Loss on sale of long-term investment Net income. (693,000) (22,000) 35,000 Question 2 [25 points] Allarco Inc. was authorized to issue 550,000 $2.00 preferred shares and 650,000 common shares. During October 2014, their first month of operations, the following selected transactions occurred: a. October 8 : Gave the corporation's promoters 10,000 common shares for their services in organizing the corporation. The directors valued the services at $30,000 b. October 8: Issued 12,000 common shares at $6.00 per share for cash. C. October 9 : 6,000 common shares were issued in exchange for land valued at $18,000. d. October 14 : 10,000 preferred shares and 12,000 common shares were issued at $7.00 and $3.00, respectively, cash. e. October 15 : Issued 13,000 preferred shares at $4.50 per share for cash. f. October 21: 8,000 of the preferred shares were issued for a total of $64,000 cash. g. October 25: 6,000 of the common shares were issued for a total of $48,000 cash. Prepare journal entries for the above transactions. Enter the transaction letter as the description when entering the transactions in the journal. Dates must be entered in the format dd/mmm i.e., January 15 would be 15/Jan) General Journal Account/Explanation Page GJ5 F Debit Credit Date