Using the indirect method, prepare a statement of cash flows for Sullivan Corp. The following are Sullivan

Using the indirect method, prepare a statement of cash flows for Sullivan Corp.

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The following are Sullivan Corp.'s comparative balance sheet accounts at December 31, 2025 and 2024, with a column showing the increase (decrease) from 2024 to 2025. Comparative Balance Sheets 2025 Cash Accounts receivable Inventory Property plant. and equipment Accumulated depreciation Investment in Myers Co. Loan receivable Total assets Accounts payable $ 815,000 1.128,000 2024 $ 700,000 1.168.000 Increase (Decrease) $115,000 (40,000) 1,850,000 1,715,000 135,000 3,307,000 2,967,000 (1.165,000) (1,040,000) 340,000 (125,000) 310,000 250,000 $6.495.000 $1,015,000 Income taxes payable 30,000 Dividends payable 80,000 $5,785,000 $ 955,000 50.000 100,000 275,000 250,000 $710,000 35,000 $ 60,000 (20.000) (20,000) Lease liability 400.000 - 400,000 Common stock. $1 par 500,000 500.000 Paid-in capital in excess of par-common stock 1,500,000 1,500,000 Retained earnings. 2.970,000 2,680,000 290,000 Total liabilities and stockholders' equity $6.495.000 $5,785.000 $710,000 Additional information: . On December 31, 2024, Sullivan acquired 25% of Myers Co.'s common stock for $275,000. On that date, the carrying value of Myers's assets and liabilities, which approximated their fair values, was $1,100,000. Myers reported income of $140,000 for the year ended December 31, 2025. No dividend was paid on Myers's common stock during the year. During 2025, Sullivan loaned $300,000 to TLC Co., an unrelated company. TLC made the first semiannual principal repayment of $50,000, plus interest at 10%, on December 31, 2025. On January 2, 2025, Sullivan sold equipment costing $60,000, with a carrying amount of $38,000, for $40,000 cash. On December 31, 2025, Sullivan entered into a capital lease for an office building. The present value of the annual rental payments is $400,000, which equals the fair value of the building. Sullivan made the first rental payment of $60,000 when due on January 2, 2026. Net income for 2025 was $370,000. Sullivan declared and paid the following cash dividends for 2025 and 2024. 2025 Declared Paid December 15, 2025 February 28, 2026 Amount $80,000 2024 December 15, 2024 February 28, 2025 $100,000 The following are Sullivan Corp.'s comparative balance sheet accounts at December 31, 2025 and 2024, with a column showing the increase (decrease) from 2024 to 2025. Comparative Balance Sheets 2025 Cash Accounts receivable Inventory Property plant. and equipment Accumulated depreciation Investment in Myers Co. Loan receivable Total assets Accounts payable $ 815,000 1.128,000 2024 $ 700,000 1.168.000 Increase (Decrease) $115,000 (40,000) 1,850,000 1,715,000 135,000 3,307,000 2,967,000 (1.165,000) (1,040,000) 340,000 (125,000) 310,000 250,000 $6.495.000 $1,015,000 Income taxes payable 30,000 Dividends payable 80,000 $5,785,000 $ 955,000 50.000 100,000 275,000 250,000 $710,000 35,000 $ 60,000 (20.000) (20,000) Lease liability 400.000 - 400,000 Common stock. $1 par 500,000 500.000 Paid-in capital in excess of par-common stock 1,500,000 1,500,000 Retained earnings. 2.970,000 2,680,000 290,000 Total liabilities and stockholders' equity $6.495.000 $5,785.000 $710,000 Additional information: . On December 31, 2024, Sullivan acquired 25% of Myers Co.'s common stock for $275,000. On that date, the carrying value of Myers's assets and liabilities, which approximated their fair values, was $1,100,000. Myers reported income of $140,000 for the year ended December 31, 2025. No dividend was paid on Myers's common stock during the year. During 2025, Sullivan loaned $300,000 to TLC Co., an unrelated company. TLC made the first semiannual principal repayment of $50,000, plus interest at 10%, on December 31, 2025. On January 2, 2025, Sullivan sold equipment costing $60,000, with a carrying amount of $38,000, for $40,000 cash. On December 31, 2025, Sullivan entered into a capital lease for an office building. The present value of the annual rental payments is $400,000, which equals the fair value of the building. Sullivan made the first rental payment of $60,000 when due on January 2, 2026. Net income for 2025 was $370,000. Sullivan declared and paid the following cash dividends for 2025 and 2024. 2025 Declared Paid December 15, 2025 February 28, 2026 Amount $80,000 2024 December 15, 2024 February 28, 2025 $100,000

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Statement of Cash Flows for Sullivan Corp For the Year Ended December 31 2025 Using the Indirect Method Operating Activities Net income 370000 Adjustm... View the full answer