PROBLEM 14-13 Prepare and Interpret a Statement of Cash Flows BL01, LOZ A comparative balance sheet for Alcorn Company containing data for the last two years is as follows: Alcorn Company Comparative Balance Sheet Assets Current assets: This Last Year Year Cash and cash equivalents. Accounts receivable Inventory Prepaid expenses. Total current assets. Property, plant, and equipment. $ 71,000 $ 50,000 590,000 608,000 610,000 420,000 10,000 5,000 1,279,000 1,085,000 2,370,000 1.800.000 Less accumulated depreciation. 615,000 560,000 Net property, plant, and equipment 1,755,000 1,240,000 Long-term investments... 80,000 130,000 Loans to subsidiaries. 120.000 70,000 Total assets.. Liabilities and Stockholders' Equity Current liabilities: Accounts payable.. Accrued abilities. Income taxes payable. Total current liabilities. Bonds payable.. Total abilities Stockholders' equity Common stock Retained earnings. Total stockholders' equity. Total liabilities and stockholders' equity.. $3,234,000 $2,525,000 $ 870,000 $570,000 25,000 42,000 133.000 118.000 1,028,000 730,000 620,000 400,000 1,648,000 1,130.000 1,090,000 1,000,000 496.000 395.000 1,586.000 1,395,000 $3,234,000 $2.525.000 The following additional information is available about the company's activities during this year: a The company declared and paid a cash dividend this year. b. Bonds with a principal balance of $380,000 were repaid during this year. c. Equipment was sold during this year for $70,000. The equipment had cost $130,000 and had $40,000 in accumulated depreciation on the date of sale. d. Long-term investments were sold during the year for $110,000. These investments had cost $50,000 when purchased several years ago. e. The subsidiaries did not repay any outstanding loans during the year. f. Alcom did not repurchase any of its own stock during the year. The company reported net income this year as follows: Sales... Cost of goods sold. Gross margin... Selling and administrative expenses. Not operating income. Nonoperating items Gain on sale of investments Loss on sale of equipment. Income before taxes. Income taxes Not income. $3,000,000 1,860,000 1,140,000 30,000 210,000 $60,000 20,000 40,000 250,000 80,000 $170,000