Statement of Cash Flows (Indirect 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		$443,800
Dividend and Interest Income		19,600
		$463,400
Wages and Other Operating Expenses	$399,000
Depreciation Expense	72,800
Franchise Amortization Expense	14,000
Loss on Sale of Equipment	9,800
Gain on Sale of Investments	(23,800)	471,800
Net Loss		$(8,400)

TOWNE COMPANY Balance Sheets
	Dec. 31, 2013	Dec. 31, 2012
Assets
Cash	$60,200	$50,400
Accounts Receivable	18,200	25,200
Interest Receivable	-	5,600
Prepaid Expenses	22,400	11,200
Long-term Investments-Available for Sale	-	98,000
Fair Value Adjustment to Investments	-	14,000
Plant Assets	974,400	917,000
Accumulated Depreciation	(327,600)	(259,000)
Franchise	127,400	40,600
Total Assets	$875,000	$903,000
Liabilities and Stockholders' Equity
Accrued Liabilities	$16,800	$19,600
Notes Payable	-	37,800
Common Stock ($10 par value)	833,000	749,000
Retained Earnings	53,200	82,600
Unrealized Gain on Investments	-	14,000
Treasury Stock	(28,000)	-
Total Liabilities and Stockholders' Equity	$875,000	$903,000

During the year, the following transactions occurred: 1. Sold equipment for $12,600 cash that originally cost $26,600 and had $4,200 accumulated depreciation. 2. Sold long-term investments that had cost $98,000 for $121,800 cash. Unrealized gains totaling $14,000 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 $21,000 dividend. 6. Purchased treasury stock for cash. 7. Acquired land valued at $84,000 by issuing 8,400 shares of common stock. Required a. Compute the change in cash that occurred in 2013. b. Prepare a statement of cash flows using the indirect method. a. Change in Cash during 2013 $Answer AnswerIncreaseDecrease

b. Use a negative sign with cash outflow answers.

TOWNE 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
Franchise Amortization
Loss on Sale of Equipment
Gain on Sale of Investments
Accounts Receivable	IncreaseDecrease
Interest Receivable	IncreaseDecrease
Prepaid Expenses	IncreaseDecrease
Accrued Liabilities	IncreaseDecrease
Cash Provided by Operating Activities
Cash Flow from Investing Activities
Sale of Equipment
Sale of Investments
Extension of Franchise
Cash Provided by Investing Activities
Cash Flow from Financing Activities
Payment of Notes Payable
Payment of Dividends
Purchase of Treasury Stock
Cash Used by Financing Activities
Net Change in Cash
Cash at Beginning of Year
Cash at End of Year