Question 1

Brecker Inc., a greeting card company, had the following statements prepared as of December 31, 2014.

BRECKER INC. COMPARATIVE BALANCE SHEET AS OF DECEMBER 31, 2014 AND 2013
		12/31/14			12/31/13
Cash		$6,194			$9,199
Accounts receivable		62,138			48,813
Short-term investments (available-for-sale)		34,868			18,132
Inventory		40,072			59,945
Prepaid rent		4,843			4,148
Equipment		153,810			129,000
Accumulated depreciationequipment		(34,966	)		(25,058	)
Copyrights		45,853			49,869
Total assets		$312,812			$294,048
Accounts payable		$45,819			$42,029
Income taxes payable		3,830			5,930
Salaries and wages payable		7,959			3,856
Short-term loans payable		8,111			10,100
Long-term loans payable		60,067			67,040
Common stock, $10 par		101,670			101,670
Contributed capital, common stock		31,650			31,650
Retained earnings		53,706			31,773
Total liabilities & stockholders equity		$312,812			$294,048

BRECKER INC. INCOME STATEMENT FOR THE YEAR ENDING DECEMBER 31, 2014
Sales revenue				$338,117
Cost of goods sold				174,850
Gross profit				163,267
Operating expenses				119,270
Operating income				43,997
Interest expense		$11,416
Gain on sale of equipment		1,844		9,572
Income before tax				34,425
Income tax expense				6,763
Net income				$27,662

Additional information:

1.		Dividends in the amount of $5,729 were declared and paid during 2014.
2.		Depreciation expense and amortization expense are included in operating expenses.
3.		No unrealized gains or losses have occurred on the investments during the year.
4.		Equipment that had a cost of $28,800 and was 70% depreciated was sold during 2014.

Prepare a statement of cash flows using the direct method. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)