Statement of Cash Flows (Indirect Method) Arctic Company's income statement and comparative balance sheets as of December 31 of 2013 and 2012 follow: ARCTIC COMPANY Income Statement For the Year Ended December 31, 2013 Sales Revenue $800,800 Cost of Goods Sold $587,400 Wages Expense 209,000 Advertising Expense 34,100 Depreciation Expense 24,200 Interest Expense 19,800 Gain on Sale of Land (27,500) 847,000 Net Loss $(46,200) ARCTIC COMPANY Balance Sheets Dec. 31, 2013 Dec. 31, 2012 Assets $53,900 46,200 117,700 11,000 396,000 (85,800) $539,000 $30,800 55,000 124,300 14,300 244,200 (61,600) $407,000 Cash Accounts Receivable Inventory Prepaid Advertising Plant Assets Accumulated Depreciation Total Assets Liabilities and Stockholders' Equity Accounts Payable Interest Payable Bonds Payable Common Stock Retained Earnings Treasury Stock Total Liabilities and Stockholders' Equity $34,100 $18,700 6,600 220,000 269,500 57,200 (33,000) $539,000 269,500 103,400 $407,000 During 2013, Arctic sold land for $77,000 cash that had originally cost $49,500. Arctic also purchased equipment for cash, acquired treasury stock for cash, and issued bonds payable for cash. Accounts payable relate to merchandise purchases. Required a. Calculate the change in cash that occurred during 2013 b. Prepare a statement of cash flows using the indirect method. a. Change in Cash during 2013 $ $ 46200 b. Use a negative sign with cash outflow answers. ARTIC COMPANY Statement of Cash Flows For Year Ended December 31, 2013 Cash Flow from Operating Activities Net Loss Add (deduct) items to convert net income to cash basis Depreciation Gain on Sale of Land Accounts Receivable Decrease Inventory Decrease Prepaid Advertising Decrease Accounts Payable Decrease Interest Payable Increase Cash Flow Used by Operating Activities Cash Flow from Investing Activities Sale of Land Purchase of Plant Assets Cash Used by Investing Activities Cash Flow from Financing Activities Issuance of Bonds Payable 24200 -27500 -8800 -6600 3300 -15400 6600 -77000 b. Use a negative sign with cash outflow answers. ARTIC COMPANY Statement of Cash Flows For Year Ended December 31, 2013 Cash Flow from Operating Activities Net Loss $ -46200 Add (deduct) items to convert net income to cash basis Decrease Decrease 24200 -27500 -8800 -6600 -3300 -15400 6600 - 77000 Decrease Decrease Increase Depreciation Gain on Sale of Land Accounts Receivable Inventory Prepaid Advertising Accounts Payable Interest Payable Cash Flow Used by Operating Activities Cash Flow from Investing Activities Sale of Land Purchase of Plant Assets Cash Used by Investing Activities Cash Flow from Financing Activities Issuance of Bonds Payable Purchase of Treasury Stock Cash Provided by Financing Activities Net Change in Cash Cash at Beginning of Year Cash at End of Year