Newtech Brake Inc. began operations on January 1, 2013. Its

Newtech Brake Inc. began operations on January 1, 2013. Its post-closing trial balance at December 31, 2013 and 2014 is shown below along with some other information.


Newtech Brake Inc. began operations on January 1, 2013. Its

Other information regarding Newtech Brake Inc. and its activities during 2014:
1. Assume all accounts have normal balances.
2. Cash dividends were declared and paid during the year.
3. Plant assets worth $70,000 were purchased during the year by paying cash of $20,000 and issuing a long-term note payable for the balance.
4. Plant assets were sold during the year.

Required
Using the information provided, prepare a statement of cash flows (applying the indirect method) for the year ended December 31, 2014.
Analysis Component: Newtech Brake Inc.’s income statement showed a net loss of $7,600 for the year ended December 31, 2014, yet the statement of cash flows shows net cash inflows from operating activities of $4,000 for the same period. Explain what this differencemeans.

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