Presented on next page are the comparative balance sheets for Vernet Company at December 31.

Additional information:
1. Operating expenses include depreciation expense $57,000 and charges from prepaid expenses of $4,400.
2. Land was sold for cash at cost for $35,000
3. Cash dividends of $82,940 were paid.
4. Net income for 2014 was $50,000.
5. Equipment was purchased for $80,000 cash. In addition, equipment costing $40,000 with a book value of $31,000 was sold for $37,000 cash.
6. Issued 25,000 shares of $1 par value common stock in exchange for land with a fair value of $25,000.
Instructions
Prepare a statement of cash flows for 2014 using the indirectmethod.

Transcribed Image Text:

Vernet Company Comparative Balance Sheets December 31 Assets 2014 2013 $41,460 57,000 64,000 140,000 16,540 150,000 175,000 77,000 170,000 12,140 140,000 215,000 (70,000 (42,000) 250,000 (70.000) Accounts receivable Inventory Prepaid expenses Equipment Accumulated depreciation-equipment Buildings Accumulated depreciation-buildings 250,000 (50,000 Total $765,600 $760,540 Liabilities and Stockholders' Equit Accounts payable Common stock, 58,000 45,000 265,000 250,000 200,540 $765,600 $760,540 Bonds payabe, $1 par 265,000 275,000 167,600 Retained earnings Total