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.

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.

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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