Stat Statement of Cash Flows The following is Grafton Corporation's comparative balance sheets for 2014 and 2013: December 31, 2014 2013 Cash 400,000 $ 350,000 Accounts receivable 564,000 584,000 Inventories Property, plant, and equipment Accumulated depreciation 925,000 857,500 1,653,500 1,483,500 (582,500) (520,000) Investment in Elkins Corporation 152,500 137,500 Loan receivable Total assets 135,000 $ 3,247,500 S 2,892,500 Accounts payable $ 507,500 $ 477,500 Income taxes payable Dividends payable 15,000 25,000 40,000 45.000 Capital lease obligation 200,000 Capital stock, common, $1 par 250,000 250,000 Additional paid-in capital 750,000 750,000 Retained earnings 1,485,000 1,345,000 Total liabilities and stockholders' equity $ 3,247,500 $ 2,892,500 2. 3. 4. Additional information: 1. On December 31, 2013, Grafton acquired 25 percent of Elkins Corporation's common stock for $137,500. On that date, the carrying value of Elkins' net assets and liabilities (which approximated fair value) was $550,000. Elkins reported income of $60,000 for the year ended December 31, 2014. No dividend was paid on Elkins' common stock during the year. During 2014, Grafton loaned $150,000 to Beckley Company, an unrelated entity. Beckley made the first semi-annual principal payment of $15,000, plus interest at 10 percent, on October 1, 2014. On January 2, 2014, Grafton sold equipment costing $30,000, with a carrying value of $17,500, for $20,000 cash. On January 2, 2014, Grafton entered into a capital lease for an office building. The present value of the annual rental payments is $200,000, which equals the fair value of the building. Grafton made the first lease payment of $30,000 when due on January 2, 2015. 5. Grafton's net income for 2014 was $180,000. 6. Grafton declared and paid cash dividends for 2014 and 2013 as follows: Declared Paid 2014 Dec. 15, 2014 Feb. 28, 2015 2013 Dec. 15, 2013 Feb. 28, 2014 Amount $ 40,000 $ 45,000 Required: Prepare a statement of cash flows for Grafton Company for 2014 using the indirect method. Include relevant supplemental schedules.