Statement of Cash Flows (Direct Method) The Towne Company's income statement and comparative balance sheets as of December 31 of 2013 and 2012 follow: TOWNE COMPANY Income Statement For the Year Ended December 31, 2013 Service Fees Earned Dividend and Interest Income $348,700 15,400 $364,100 Wages and Other Operating Expenses $313,500 Depreciation Expense 57,200 Franchise Amortization Expense 11,000 Loss on Sale of Equipment 7,700 Gain on Sale of Investments Net Income (18,700) 370,700 $-6,600 Assets TOWNE COMPANY Balance Sheets Dec. 31, 2013 Dec. 31, 2012 Cash Accounts Receivable Interest Receivable $47,300 $39,600 14,300 19,800 - 4,400 Prepaid Expenses Long-term Investments-available for Sale Fair Value Adjustment to Investments 17,600 8,800 - 77,000 11,000 Plant Assets 765,600 720,500 Accumulated Depreciation (257,400) (203,500) Franchise 100,100 31,900 Total Assets $687,500 $709,500 Liabilities and Stockholders' Equity Accrued Liabilities $13,200 Notes Payable $15,400 - 29,700 Common Stock ($10 par value) Retained Earnings 654,500 41,800 588,500 64,900 Unrealized Gain on Investments - 11,000 Treasury Stock (22,000) Total Liabilities and Stockholders' Equity $687,500 $709,500