Problem 15-14 (Algo) Prepare and Interpret a Statement of Cash Flows [LO15-1, LO15-2]

A comparative balance sheet for Lomax Company containing data for the last two years is as follows:

Lomax Company Comparative Balance Sheet
	This Year		Last Year
Assets
Current assets:
Cash and cash equivalents	$	74,000	$	52,400
Accounts receivable		596,000		617,500
Inventory		611,600		423,000
Prepaid expenses		12,400		6,500
Total current assets		1,294,000		1,099,400
Property, plant, and equipment		2,385,000		1,812,000
Less accumulated depreciation		618,600		562,700
Net property, plant, and equipment		1,766,400		1,249,300
Long-term investments		86,300		139,000
Loans to subsidiaries		123,000		71,500
Total assets	$	3,269,700	$	2,559,200
Liabilities and Stockholders' Equity
Current liabilities
Accounts payable	$	874,800	$	573,000
Accrued liabilities		26,800		44,700
Income taxes payable		136,900		120,400
Total current liabilities		1,038,500		738,100
Bonds payable		635,000		409,000
Total liabilities		1,673,500		1,147,100
Stockholders equity:
Common stock		1,096,000		1,003,000
Retained earnings		500,200		409,100
Total stockholders equity		1,596,200		1,412,100
Total liabilities and stockholders' equity	$	3,269,700	$	2,559,200

The following additional information is available about the companys activities during this year:

1. The company declared and paid a cash dividend this year.

2. Bonds with a principal balance of $383,000 were repaid during this year.

3. Equipment was sold during this year for $71,500. The equipment had cost $136,000 and had $43,600 in accumulated depreciation on the date of sale.

4. Long-term investments were sold during the year for $116,000. These investments had cost $52,700 when purchased several years ago.

5. The subsidiaries did not repay any outstanding loans during the year.

6. Lomax did not repurchase any of its own stock during the year.

The company reported net income this year as follows:

Sales					$	3,060,000
Cost of goods sold						1,897,200
Gross margin						1,162,800
Selling and administrative expenses						945,900
Net operating income						216,900
Nonoperating items:
Gain on sale of investments	$	63,300
Loss on sale of equipment		(20,900	)			42,400
Income before taxes						259,300
Income taxes						83,000
Net income					$	176,300

Required:

Using the indirect method, prepare a statement of cash flows for this year. (List any deduction in cash outflows as negative amounts.)