Statement of Cash Flows (Indirect Method) The Sweet Company's income statement and comparative balance sheets as of December 31 of 2013 and 2012 are presented below: SWEET COMPANY Income Statement For the Year Ended December 31, 2013 Sales Revenue Cost of Goods Sold Wages Expense Depreciation Expense Insurance Expense Interest Expense Income Tax Expense Gain on Sale of Equipment Net Income $1,135,200 $608,400 243,600 72,000 15,600 14,400 68,400 (19,200) 1,003,200 $132,000 SWEET COMPANY Balance Sheets Dec. 31, 2013 Dec. 31, 2012 Assets Dec. 31, 2013 Dec. 31, 2012 Assets Cash Accounts Receivable Inventory Prepaid Insurance Plant Assets Accumulated Depreciation Total Assets s27,600 81,600 212,400 10,800 1,064,400 $37,200 51,600 151,200 13,200 924,000 (226,800) (210,000) $1,170,000 $967,200 Liabilities and Stockholders' Equity Accounts Payable Interest Payable Income Tax Payable Bonds Payable Common Stock Retained Earnings Treasury Stock $44,400 6,000 14,400 162,000 792,000 213,600 (62,400) $32,400 19,200 96,000 702,000 117,600 Total Liabilities and Stockholders Equity $1170,000 $967.200 During the year, Sweet Company sold equipment for $32.400 cash that originally cost $68,400 and had $55.200 accumulated depreciation. New equipment was purchased for cash. Bonds payable and common stock were issued for cash. Cash dividends of $36.000 were declared and paid. At the end of the year, shares of treasury stock were purchased for cash. Accounts payable relate to merchandise purchases. Required a. Compute the change in cash that occurred during 2013. b. Prepare a statement of cash flows using the indirect method. a. Change in Cash during 2013$ 0 Decrease # b. Use a negative sign with cash outflow answers. SWEET COMPANY Statement of Cash Flows For Year Ended December 31, 2013 Cash Flow from Operating Activities Net Income Add (deduct) items to convert net income to cash basis Depreciation Gain on Sale of Equipment Gain on Sale of Equipment Accounts Receivable Inventory Prepaid Insurance Accounts Payable Interest Payable Income Tax Payable 0 Cash Flow Provided by Operating Activities Cash Flow from Investing Activities Sale of Equipment Purchase of Equipment Cash Used by Investing Activities Cash Flow from Financing Activities Issuance of Bonds Payable Purchase of Common Stock Payment of Dividends Purchase of Treasury Stock Cash Provided by Financing Activities Net + in Cash Cash at Beginning of Year Cash at End of Year Cash Flow from Operating Activities Net Income Add (deduct) items to convert net income to cash basis Depreciation Gain on Sale of Equipment 0 Accounts Receivable inventory Increase Prepaid insurance Accounts Payable Interest Payable Decrease 0 Income Tax Payable Cash Flow Provided by Operating Activities Cash Flow from Investing Activities Sale of Equipment