Use the All Wired data from Problem.

In Problem, the 2015 income statement and comparative balance sheet of All Wired, Inc. follow:

Additionally, All Wired purchased land of $ 24,500 by financing it 100% with long-term notes payable during 2015. During the year, there were no sales of land, no retirements of stock, and no treasury stock transactions. A plant asset was disposed of for $ 0. The cost and the accumulated depreciation of the disposed asset was $ 12,060.

Requirements
1. Prepare the 2015 statement of cash flows by the direct method.
2. How will what you learned in this problem help you evaluate aninvestment?

Transcribed Image Text:

ALL WIRED, INC. Income Statement Year Ended December 31, 2015 Sales Revenue Cost of Goods Sold Gross Profit Operating Expenses: $ 438,000 209,200 228,800 Salaries Expense Depreciation Expensa lant Assets Other Operating Expenses Total Operating Expenses $ 72,400 14,500 10,000 96,900 Operating Income Other Revenues and (Expenses): 131,900 Interest Revenue Interest Expense Total Other Revenues and (Expenses) 8,500 (21,500) Net Income Before Income Taxes Income Tax Expense Net Income (13,000) 118,900 19,400 $99,500 ALL WIRED, INC Comparative Balance Sheet December 31, 2015 and 2014 2015 2014 Assets Current Assets: Cash Accounts Receivable Merchandise Inventory 26,700 15,600 26,500 79,900 25,300 91,900 Long-term Assets: Plant Assets Accumulated Depreciation-plant Assets Land 123,480 (20,580) 35,500 S 271,500 108,840 (18,140) 11,000 S 234,500 Total Assets Liabilities Current Liabilities: Accounts Payable Accrued Liabilities 35,600 30,500 28,900 30,600 Long-term Liabilities: Notes Payable 77,000 103,000 Total Liabilities 141,500 164,100 Stockholders' Equity Common Stock Retained Eamings Total Stockholders' Equity Total Liabilities and Stockholders' Equity 88,200 64,300 6,100 70,400 271,500 234.500 41,800 130,000