Audio City, Inc., is developing its annual financial statements at December 31, 2013. The statements are complete except for the statement of cash flows. The completed comparative balance sheets and the income statement are summarized below:

Additional Data:
a. Bought equipment for cash, $73,000.
b. Paid $15,000 on the long-term note payable.
c. Issued new shares of stock for $30,000 cash.
d. Dividends of $5,000 were paid in cash.
e. Other expenses included depreciation, $15,000; wages, $20,000; taxes, $25,000.

f. Accounts Payable includes only inventory purchases made on credit. Because a liability relating to taxes does not exist, assume that they were fully paid in cash.

Required:
1. Prepare the statement of cash flows for the year ended December 31, 2013, using the indirect method.
2. Evaluate the statement of cashflows.

2013 2012 Balance Sheet at December 31 Cash Accounts Receivable Merchandise Inventory Property and Equipment Less: Accumulated Depreciation 15,000 22,000 223,000 (60,000) $260,000 60,000 65,000 20,000 20,000 150,000 (45,000) $210,000 Accounts Payable Wages Payable Note Payable, Long-Term Contributed Capital Retained Earnings $ 8,000 19,000 1,000 75,000 70,000 45,000 $210,000 2,000 60,000 100,000 90,000 $260,000 Income Statement for 2013 Sales Cost of Goods Sold Other Expenses Net Income $200,000 90,000 60,000 50,000