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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
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 Balance Sheets Dec. 31, 2013 Dec. 31, 2012 \begin{tabular}{|l|r|r|} \hline Assets & & \\ \hline Cash & $47,300 & $39,600 \\ \hline Accounts Receivable & 14,300 & 19,800 \\ \hline Interest Receivable & & 4,400 \\ \hline Prepaid Expenses & 17,600 & 8,800 \\ \hline Long-term Investments-available for Sale & & 77,000 \\ \hline Fair Value Adjustment to Investments & & 11,000 \\ \hline Plant Assets & 765,600 & 720,500 \\ \hline Accumulated Depreciation & (257,400) & (203,500) \\ \hline Franchise & 100,100 & 31,900 \\ \hline Total Assets & $687,500 & $709,500 \\ \hline Liabilities and Stockholders' Equity & & \\ \hline Accrued Liabilities & $13,200 & $15,400 \\ \hline Notes Payable & & 29,700 \\ \hline Common Stock (\$10 par value) & 654,500 & 588,500 \\ \hline Retained Earnings & 41,800 & 64,900 \\ \hline Unrealized Gain on Investments & & 11,000 \\ \hline Treasury Stock & (22,000) & \\ \hline Total Liabilities and Stockholders' Equity & $687,500 & $709,500 \\ \hline \end{tabular} During the year, the following transactions occurred: 1. Sold equipment for $9,900 cash that originally cost $20,900 and had $3,300 accumulated depreciation. 2. Sold long-term investments that had cost $77,000 for $95,700 cash. Unrealized gains totaling $11,000 related to these investments had been recorded in earlier years. At year-end, the fair value adjustment and unrealized gain account balances were eliminated. 3. Paid cash to extend the company's exclusive franchise for another three years. 4. Paid off a note payable at the bank on January 1. 5. Declared and paid a $16,500 dividend. 6. Purchased treasury stock for cash. 7. Acquired land valued at $66,000 by issuing 6,600 shares of common stock. Required a. Compute the change in cash that occurred in 2013. b. Prepare a statement of cash flows using the direct method. Use one cash outflow for "cash paid for wages and other operating expenses." Accounts payable relates to inventory purchases only. a. Change in Cash during 2013 b. Use a negative sign with cash outflow answers
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