Prepare the statement of cash flows using the indirect method for Lucky 7, Inc. based on the information provided below:

Lucky 7, Inc. Income Statement For the year ended December 31, 2015 Sale Cost of goods sold Gross margin $520,000 200,000 320,000 Operating expenses including depreciation expense of $20,000 Operating income 230,000 90,000 Other income (expenses) Interest expense Interest income Gain on sale of investments Loss on sale of plant assets Income before income taxes Income taxes expense Net income (20,000) 70,000 21,000 49,000 ($24,000) 2,000 7,000 (5,000) Lucky 7, Inc. Statement of retained earnings For the year ended December 31, 2015 Retained earnings, January 1, 2015 Add: net income 49,000 Deduct: Dividends 4,000 Increase in retained earnings Retained earnings, December 31, 2015 $66,000 45,000 111,000 Lucky 7, Inc. Comparative Balance Sheets December 31, 2015 and 2014 ASSETS 2015 2014 Change crease Current assets: Cash 35,000 14,500 20,500 Increase Accounts receivable (net) 17,500 19,500 Decrease Inventory 59,000 42,000 Increase Prepaid expenses 500 2,500 Decrease Total current assets 112,000 78,500 Long-term Investments 17,000 Increase 62,000 Plant assets Increase or De- (2,000) 17,000 (2,000) 33,500 45,000 520,000 Increase Less: accumulated depreciation 50,000 15,000 Increase Total plant assets 470,000 320,000 285,000 185,000 Total assets 408,500 235,500 22,500 4,500 1,200 (200) 644,000 LIABILITIES Current liabilities: Accounts payable 27,000 Increase Accrued liabilities 1,000 Decrease Income taxes payable 1,500 (1,000) Decrease Total current liabilities 29,500 3,300 200,000 35,000 2,500 26,200 Long term liabilities: Bonds Payable Increase 250,000 150,000 Total liabilities 279,500 176,200 STOCKHOLDERS' EQUITY Common stock, $5 par value 150,000 100,000 50,000 Increase Additional paid-in capital 116,000 66,300 Increase Retained earnings 111,000 66,000 Increase Treasury stock (12,500) 0 Increase Total stockholders' equity 364,500 232,300 Total liabilities and stockholders' 100,000 103,300 49,700 45,000 (12,500) 132,200 equity 644,000 408,500 235,500 We will assume that the following transaction occurred related to the accounts listed above: 1. Purchased long-term investments in the amount of $100,000. Debit Long-term investments Cash Credit $100,000 $100,000 2. Sold for $90,000 long-term investments that cost $83,000. Debit Cash Credit $90,000 Long-term investments Gain on sale $83,000 $7,000 3. Purchased plant assets in the amount of $200,000. Debit Plant assets Cash Credit $200,000 $200,000 4. Sold plant assets for $40,000 cash that had a cost of $50,000, and a balance in accumulated depreciation of $5,000. Debit Cash Accumulated depreciation Loss on sale Plant assets Credit $40,000 5,000 5,000 $50,000 5. Purchased $50,000 of plant assets in exchange for bonds payable. This is a non cash transaction. Debit Plant assets Bonds payable Credit $50,000 $50,000 6. We repaid $75,000 of bonds payable. Debit Bonds payable Cash Credit $75,000 $75,000 Assignment number 5: Assignment number 5 is due no later than 11:59pm on Sunday, July 12. NOTE: This problem has a value of 3.25% of the final grade. Objectives: Prepare the statement of cash flows using the indirect method for Lucky 7, Inc. based on the information pro vided below: Assignment information: The following information is provided for Lucky 7, Inc. (see separate attachment) Income statement for the year ending December 31, 2015 Statement of retained earnings for the year ending December 31, 2015 Comparative balance sheet for 2014 and 2015 Selected journal entries Required: 1. 2. 3. 4. Prepare the cash flows from operations section of the statement of cash flows using the indirect method. Prepare the cash flows from investing section of the statement of cash flows. Prepare the cash flows from financing section of the statement of cash flows. Show the entire completed statement of cash flows based. All work must be original and on a document that you created. Note* I created this docu ment