Question 4 [30 points] Use the Velor Inc. financial statements and supplementary information given below to prepare a statement of cash flows for the year ended December 31, 2014, using the indirect method Additional Information: a. Purchased machinery for $41,000 cash. b. Sold the long-term investment on January 1, 2014 for $53,000. c. Sold machinery for $11,500 cash that had originally cost $51,500 and had $40,000 of accumulated depreciation. d. Issued $41,000 of bonds payable at face value. e. The short-term investment is a treasury bill that was purchased with maturity in 90 days. (select one) Statement of Cash Flows (select one) Cash flows from operating activities Adjust. to reconcile net income to cash provided by oper. act.: Velor Inc. Comparative Balance Sheet Information December 31 Assets 2014 2013 Cash 161,500 175,000 Short-term investments 170.000 163,000 Accounts receivable 122,800 76,000 Merchandise inventory. 50,200 90,000 Long term investment 0 34,000 Machinery. 229,500 240,000 Accumulated depreciation (189,000) (185,000) Total assets 545,000 593,000 Cash flows from investing activities Cash flows from financing activities (select one) Statement of Cash Flows (select one) Cash flows from operating activities Adjust to reconcile net income to cash provided by oper. act.: Velor Inc. Comparative Balance Sheet Information December 31 Assets 2014 2013 Cash 161,500 175,000 Short-term investments 170.000 163,000 Accounts receivable 122.800 76,000 Merchandise inventory. 50,200 90,000 Long term investment 0 34,000 Machinery 229,500 240,000 Accumulated depreciation (189,000) (185,000) Total assets 545,000 593,000 Cash flows from investing activities Cash flows from financing activities Liabilities and Equity Accounts payable Dividends payable Bonds payable Share capital Retained earnings Total liabilities and equity 24,000 5,000 41,000 303,000 172,000 545,000 71,000 25,000 0 303,000 194,000 593,000 Net increase (decrease) in cash Cash at beginning of year Cash at end of year Velor Inc. Income Statement Cash flows from investing activities LIVIUICIDIUISU livenoly. Long term investment Machinery. Accumulated depreciation Total assets 30,200 YUUUU 0 34,000 229,500 240,000 (189,000) (185,000) 545,000 593,000 Cash flows from financing activities Liabilities and Equity Accounts payable Dividends payable Bonds payable Share capital Retained earnings Total liabilities and equity 24,000 5,000 41,000 303,000 172,000 545,000 71.000 25,000 0 303,000 194,000 593,000 Net increase (decrease) in cash Cash at beginning of year, Cash at end of year Velor Inc. Income Statement For Year Ended December 31, 2014 Sales 540,000 Cost Of Goods Sold 500,000 Depreciation expense 44,000 Other expenses 37,000 (581,000) Gain on sale of long-term investment 19,000 Net loss 22,000 12.02
