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 86,080 $ 62,000 Accounts receivable 620,000 647,500 Inventory 626,000 435,880 Prepaid expenses 22,000 12,500 Total current assets 1,354,000 1,157,000 Property, plant, and equipment 2,445,000 1,860,000 Less accumulated depreciation 633,000 573,500 Net property, plant, and equipment 1,812,800 1,286,500 Long-term investments 111,500 175,000 Loans to subsidiaries 135,000 77,500 Total assets $3,412,500 $2,696,000 Liabilities and Stockholders' Equity Current liabilities Accounts payable $ 894,000 $ 585,000 Accrued liabilities 34,000 55,500 Income taxes payable 152,500 130,000 Total current liabilities 1,880,500 770,588 Bonds payable 695,000 445,000 Total liabilities 1,775,500 1,215,500 Stockholders' equity: Common stock 1,120,000 1,015,800 Retained earnings 517,000 465,500 Total stockholders' equity 1,637,088 1,480,500 Total liabilities and stockholders' equity $3,412,500 $2,696,000 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 $395,000 were repaid during this year. c. Equipment was sold during this year for $77,500. The equipment had cost $160,000 and had $58,000 in accumulated depreciation on the date of sale. d. Long-term investments were sold during the year for $140,000. These investments had cost $63,500 when purchased several years ago e. The subsidiaries did not repay any outstanding loans during the year. 1. Lomax did not repurchase any of its own stock during the year. ok The company reported net income this year as follows: $3,300,000 2,046,000 1,254,000 1,009,500 244,500 Sales Cost of goods sold Gross margin Selling and administrative expenses Net operating income Nonoperating items: Gain on sale of investments Loss on sale of equipment Incone before taxes Income taxes Net income $76,500 (24.500) 52,000 296,500 95,000 $ 201,500 Required: Using the Indirect method, prepare a statement of cash flows for this year. (List any deduction in cash outflows as negative amounts.) Required: Using the indirect method, prepare a statement of cash flows for this year. (List any deduction in cash outflows as negative amounts.) Lomax Company Statement of Cash Flows Operating activities: 0 0 Investing activities 0 0 Investing activities: 0 Financing activities: 0 0 Beginning cash and cash equivalents Ending cash and cash equivalents $ 0