Question 4 (14 marks) Farmiga Inc. Balance Sheet December 31 2014 2013 Assets Cash $120,600 $176,400 Accounts Receivable 181,800 135,000 Inventory 369,000 257,400 Long-term Debt Investment 176,400 0 Property Plant and Equipment 1,008,000 828,000 Less: Accumulated Depreciation (292,500) (252,000) $1,563,300 $1,144,800 Liabilities & Shareholder's Equity Accounts Payable $157,500 $117,000 Dividends Payable 10,800 0 Income Tax Payable 25,200 28,800 Long-term Notes Payable 81,000 0 Common Shares 1,170,000 945,000 Retained Earnings 118,800 54,000 $1,563,300 $1,144,800 Farmiga Inc. Income Statement Year Ended December 31, 2014 Sales $1,137,600 Cost of Goods Sold 772,200 Gross profit 365,400 Operating expenses $265,500 Loss on Sale of Equipment 3,600 269,100 Profit from Operations 96,300 Interest expense 5,400 Interest revenue 9,900 4,500 Profit before Income Tax 100,800 Income tax expense 25,200 Profit $75,600. Question 4 (continued) Required: Prepare a complete Statement of Cash Flow using the Indirect method . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Additional Information: 1 Cash Dividends of $10,800 were declared on December 31, 2014, payable January 15, 2015 2 A long term debt investment was acquired for cash at a cost of $175,500 3 Depreciation expense is included in the operating expenses. 4 The company issued 22,500 common shares for cash on March 31, 2014. The fair value of the shares were $10 per share. The proceeds were used to purchase additional equipment 5 Equipment that originally cost $45,000 was sold during the year for cash. The equipment had a net book value of $16,200 at the time of sale. 6 The company issued a note payable for $90,000 and repaid $9,000 of it by year end. 7 Accounts Payable is used for Merchandise purchases, Accounts Receivable relate to Sales 8 65,625 shares were outstanding Dec. 31, 2013. 15,625 more common shares were issued Aug 31/2014 9 Westerner Inc. is a private company reporting under ASPE.