Problem 23-5

You have completed the field work in connection with your audit of Alexander Corporation for the year ended December 31, 2014. The balance sheet accounts at the beginning and end of the year are shown below.

		Dec. 31, 2014		Dec. 31, 2013			Increase or (Decrease)
Cash		$664,181		$712,220			($48,039	)
Accounts receivable		1,121,923		843,670			278,253
Inventory		1,772,663		1,457,900			314,763
Prepaid expenses		28,680		19,120			9,560
Investment in subsidiary		264,095		0			264,095
Cash surrender value of life insurance		5,507		4,302			1,205
Machinery		494,730		454,100			40,630
Buildings		1,279,128		974,881			304,247
Land		125,475		125,475			0
Patents		164,910		152,960			11,950
Copyrights		95,600		119,500			(23,900	)
Bond discount and issue cost		10,760		0			10,760
		$6,027,652		$4,864,128			$1,163,524
Accrued taxes payable		$215,698		$190,244			$25,454
Accounts payable		715,279		669,200			46,079
Dividends payable		167,300		0			167,300
Bonds payable8%		298,750		0			298,750
Bonds payable12%		0		239,000			(239,000	)
Allowance for doubtful accounts		84,367		95,600			(11,233	)
Accumulated depreciationbuildings		1,013,360		956,000			57,360
Accumulated depreciationmachinery		413,470		310,700			102,770
Premium on bonds payable		0		5,736			(5,736	)
Common stockno par		2,811,118		3,473,148			(662,030	)
Paid-in capital in excess of parcommon stock		260,510		0			260,510
Retained earningsunappropriated		47,800		(1,075,500	)		1,123,300
		$6,027,652		$4,864,128			$1,163,524

STATEMENT OF RETAINED EARNINGS FOR THE YEAR ENDED DECEMBER 31, 2014
January	1, 2014		Balance (deficit)		$(1,075,500	)
March	31, 2014		Net income for first quarter of 2014		59,750
April	1, 2014		Transfer from paid-in capital		1,015,750
			Balance		0
December	31, 2014		Net income for last three quarters of 2014		215,100
			Dividend declaredpayable January 21, 2013		(167,300	)
			Balance		$47,800

Your working papers from the audit contain the following information:

1.		On April 1, 2014, the existing deficit was written off against paid-in capital created by reducing the stated value of the no-par stock.
2.		On November 1, 2014, 70,744 shares of no-par stock were sold for $614,230. The board of directors voted to regard $5 per share as stated capital.
3.		A patent was purchased for $35,850.
4.		During the year, machinery that had a cost basis of $39,196 and on which there was accumulated depreciation of $12,428 was sold for $21,510. No other plant assets were sold during the year.
5.		The 12%, 20-year bonds were dated and issued on January 2, 2002. Interest was payable on June 30 and December 31. They were sold originally at 106. These bonds were redeemed at 100.9 plus accrued interest on March 31, 2014.
6.		The 8%, 40-year bonds were dated January 1, 2014, and were sold on March 31 at 97 plus accrued interest. Interest is payable semiannually on June 30 and December 31. Expense of issuance was $2,005.
7.		Alexander Corporation acquired 70% control in Crimson Company on January 2, 2014, for $239,000. The income statement of Crimson Company for 2014 shows a net income of $35,850.
8.		Extraordinary repairs to buildings of $17,208 were charged to Accumulated DepreciationBuildings.
9.		Interest paid in 2014 was $25,095 and income taxes paid were $81,260.

From the information given, prepare a statement of cash flows using the indirect method. A worksheet is not necessary, but the principal computations should be supported by schedules or general ledger accounts. The company uses straight-line amortization for bond interest. (Round answers to 0 decimal places, e.g. 2,500. Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)