The 2014 comparative balance sheet and income statement of 4 Seasons Supply Corp. follow. 4 Seasons had no non-cash investing and financing transactions during 2014. During the year, there were no sales of land or equipment, no issuance of notes payable, and no repurchase of shares transactions.

Requirements
1. Prepare the 2014 statement of cash flows using the direct method.
2. How will what you learned in this problem help you evaluate an investment?

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4 Seasons Supply Corp Comparative Balance Sheet as at December 31, 2014 and 2013 December 31, Increase 2014 2013 (Decrease) Current assets: Cash and cash equivalents Accounts receivable Inventories Prepaid expenses $ 17,600 27,200 83,600 2,500 5,300 27,600 87,200 1,900 $12,300 (400) (3,600) 600 Property, plant, and equipment: Land 89,000 53,500 $273,400 60,000 49,400 $231,400 29,000 4,100 $42,000 Equipment, n Total assets Current liabilities: Accounts payable Salary payable $ 35,800 33,700 6,600 23,700 2,100 (3,500) (1,100) 3,100 Other accrued liabilitie Long-term liabilities: Notes payable Shareholders' equity 22,600 75,000 88,300 100,000 (25,000) Common s Retained Total liabilities and shareholders' equity 64,700 2,700 $273,400 $231,400 23,600 45,900 $42,000 earnings 48,600 Seasons Supply Corp. Income Statement for the Year Ended December 31, 2014 Revenues Sales revenue $228,700 Expenses: $70,600 27,800 4,000 10,500 11,600 29,100 Cost of goods sold Salary expense Other operating expense Interest expense Income tax expense.. Total expense Net income.... 153,600 $ 75,100