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A comparative balance sheet for Lomax Company containing data for the last two years is as follows: Lomax Company Comparative Balance Sheet This Last Year Year Assets Current assets: Cash and cash equivalents Accounts receivable Inventory Prepaid expenses $ 84,000 $ 60,400 616,000 642,500 623,600 20,400 433,000 11,500 1,344,000 1147,400 Total current assets 2,435,000 1,852,000 Property, plant, and equipment Less accumulated depreciation 630,600 571,700 1,804,400 1,280,300 Net property, plant, and equipment 107.300 169,000 Long-term investments 76,500 133,000 Loans to subsidiaries Loans to subsidiaries 133,000 76,500 Total assets 3,388,700 2,673,200 Liabilities and Stockholders' Equity Current liabilities Accounts payable Accrued liabilities Income taxes payable $890,800 $583,000 32,800 149,900 53,700 128,400 1,073,500 Total current liabilities 765,100 Bonds payable 439,000 685,000 1,758,500 1,204,100 Total liabilities Stockholders' equity: 1,013,000 Common stock 1,116,000 Retained earnings 514,200 456,100 1,630,200 1,469,100 Total stockholders' equity 3,388,700 2,673,200 Total liabilities and stockholders' equity $ $3.388,7002,673,200 Total liabilities and stockholders' equity The following additional information is available about the company's activities during this year a. The company declared and paid a cash dividend this year. b. Bonds with a principal balance of $393,000 were repaid during this year. Equipment was sold during this year for $76,500. The equipment had cost $156,000 and had $55,600 in accumulated depreciation on the date of sale. d. Long-term investments were sold during the year for $136,000. These investments had cost $61,700 when purchased several years ago. e. The subsidiaries did not repay any outstanding loans during the year f. Lomax did not repurchase any of its own stock during the year. C. The company reported net income this year as follows: Sales $3,260,000 2,021,200 Cost of goods sold Gross margin Selling and administrative 1,238,800 expenses 998,900 $3,260,000 2,021,200 Sales Cost of goods sold Gross margin Selling and administrative 1,238,800 expenses 998,900 239,900 Net operating income Nonoperating items: Gain on sale of investments Loss on sale of equipment $4,300 23,900 50,400 290,300 Income before taxes Income taxes 93,000 Net income $ 197,300 e Co pany repo1 Leu net ICOme uns yedr ds iUOws. Sales $3,260,000 2,021,200 Cost of goods sold Gross margin Selling and administrative 1,238,800 expenses 998,900 Net operating income Nonoperating items: Gain on sale of investments Loss on sale of equipment 239,900 $74,300 23,900 50,400 Income before taxes Income taxes 290,300 93,000 Net income $ 197,300 Required: 1. Using the indirect method, prepare a statement of cash flows for this year. (List any deduction in cash and cash outflows as negative amounts.) Required: 1.Using the indi rect method, prepare a statement of cash flows for this year. (List any deduction in cash and cash outflows as negative amounts.) Lomax Company Statement of Cash Flows Operating activities: Adjustments to convert net income to cash basis: Investing activities: Investing activities: Financing activities Beginning cash and cash equivalents Ending cash and cash equivalents
