Prepare a 2014 Statement of Cash Flows for the Boyd Company in good form. The operating activities section may be prepared using either the direct or the indirect method (both result in the same Cash Flow from Operations amounts.

Boyd Company Income Statement - For the year ended 12/31/14

Sales $1,200,000

Cost of Goods Sold ( 690,000)

Gross Margin $ 510,000

Operating Expenses ( 375,000)

Income from Operations $ 135,000

Other Revenue & Expense: Investment Revenue 25,000

Loss on sale of equipment ( 8,000)

Interest Expense ( 7,000)

Income before Tax $ 145,000

Income Tax Expense ( 52,000)

Net Income $ 93,000 =========

Boyd Company Balance Sheet - As of 12/31/14 and 12/31/13

2014 2013

ASSETS

Cash $ 52,400 $ 40,000

Accounts Receivable $58,500 $45,700

Allow for Dbtful Accts ( 1,900) 56,600 ( 1,000) 44,700

Inventory 87,000 63,000

Prepaid Rent 14,000 16,000

Investment in XYZ 310,000 285,000

Equipment $380,000 $266,300

Accumulated Depreciation ( 100,000) 280,000 ( 75,000) 191,300

Total Assets $800,000 $640,000 ======= =======

LIABILITIES & OWNERS EQUITY

Accounts Payable $ 25,000 $ 18,000

Interest Payable 30,000 23,000

Bonds Payable $400,000 $400,000

Premium on Bonds Payable 27,000 427,000 30,000 430,000

Deferred Tax Liability 90,000 75,000

Common Stock 30,000 10,000

Paid in Capital in Excess of Par 80,000 40,000

Retained Earnings 118,000 44,000

Total Liabilities & Owners Equity $800,000 $640,000 ======= =======

See Additional Information on next page.

Additional Information:

1. Equipment with an original cost of $90,000 and accumulated depreciation of $60,000 was sold for cash.

2. Depreciation, amortization, and bad debt expense are included in operating expenses.

3. Boyd accounts for their investment in XYZ using the equity method. XYZ Company paid no cash dividends during 2014.

4. Boyd declared cash dividends during the year. All have been paid by the end of the year.