Statement of Cash FlowsIndirect Method

The comparative balance sheet of Amelia Enterprises, Inc. at December 31, 2014 and 2013, is as follows:

		Dec. 31, 2014		Dec. 31, 2013
Assets
Cash		$88,860		$109,010
Accounts receivable (net)		136,540		146,960
Merchandise inventory		195,070		182,140
Prepaid expenses		7,950		5,520
Equipment		397,350		326,350
Accumulated depreciation-equipment		(103,310)		(80,030)
	Total	$722,460		$689,950
Liabilities and Stockholders' Equity
Accounts payable (merchandise creditors)		$151,720		$144,200
Mortgage note payable		0		206,990
Common stock, $1 par		22,000		14,000
Paid-in capital in excess of par-common stock		347,000		195,000
Retained earnings		201,740		129,760
	Total	$722,460		$689,950

Additional data obtained from the income statement and from an examination of the accounts in the ledger for 2014 are as follows:

Net income, $184,270.

Depreciation reported on the income statement, $50,370.

Equipment was purchased at a cost of $98,090, and fully depreciated equipment costing $27,090 was discarded, with no salvage realized.

The mortgage note payable was not due until 2016, but the terms permitted earlier payment without penalty.

8,000 shares of common stock were issued at $20 for cash.

Cash dividends declared and paid, $112,290.

Prepare a statement of cash flows, using the indirect method of presenting cash flows from operating activities. Use the minus sign to indicate cash out flows, cash payments, decreases in cash and for any adjustments, if required.

Amelia Enterprises, Inc.
Statement of Cash Flows
For the Year Ended December 31, 2014
Cash flows from operating activities:
Common stock Depreciation Inventory Net income Prepaid expenses Retained earnings Correct 5				$ Correct 6
Adjustments to reconcile net income to net cash flow from operating activities:
Cash paid for dividends Decrease in accounts receivable Depreciation Increase in accounts receivable Net income Retained earnings Correct 8				Correct 9
Changes in current operating assets and liabilities:
Decrease in accounts payable Decrease in accounts receivable Decrease in inventory Depreciation Increase in accounts receivable Correct 11				Correct 12
Decrease in accounts payable Decrease in merchandise inventory Decrease in prepaid expenses Depreciation Increase in accounts receivable Increase in merchandise inventory Correct 13				Correct 14
Decrease in accounts payable Decrease in inventory Decrease in prepaid expenses Increase in prepaid expenses Correct 15				Correct 16
Decrease in accounts payable Decrease in prepaid expenses Depreciation Increase in accounts payable Net income Retained earnings Correct 17				Correct 18
Net cash flow from operating activities						$ Correct 20
Cash flows from investing activities:
Cash paid for common stock Cash paid for equipment Cash paid for dividends Cash paid for merchandise inventory Cash paid for prepaid expenses Cash paid to retire mortgage note Correct 22				$ Correct 23
Net cash flow used for investing activities						Correct 25
Cash flows from financing activities:
Cash received from customers Cash received from depreciation Cash received from dividends Cash received from net income Cash received from retained earnings Cash received from sale of common stock Correct 27				$ Correct 28
Less cash paid for accounts payable Less cash paid for common stock Less cash paid for dividends Less cash paid for equipment Less cash paid for inventory Less cash paid for prepaid expenses Correct 29		$ Correct 30
Less cash paid for accounts payable Less cash paid for accumulated depreciation Less cash paid for common stock Less cash paid for depreciation Less cash paid for inventories Less cash paid to retire mortgage note payable Correct 31		Correct 32		Correct 33
Net cash flow used in financing activities						Correct 35
Decrease in cash Increase in cash Correct 36						$ Correct 37
Cash at beginning of the year						Correct 39
Cash at end of the year						$ Correct 41