Module 8: Problem 1.

Hartman, Inc. has prepared the following comparative balance sheets for 2012 and 2013:

		2013	2012
	Cash	$ 287,000	$ 153,000
	Accounts receivable	149,000	117,000
	Inventory	150,000	180,000
	Prepaid expenses	18,000	27,000
	Plant assets	1,280,000	1,050,000
	Accumulated depreciation	(450,000)		(375,000)
	Patent	153,000	174,000
		$1,587,000	$1,326,000

	Accounts payable	$ 153,000	$ 168,000
	Accrued liabilities	60,000	42,000
	Mortgage payable		450,000
	Preferred stock	525,000
	Additional paid-in capitalpreferred	120,000
	Common stock	600,000	600,000
	Retained earnings	129,000	66,000
		$1,587,000	$1,326,000

1. The Accumulated Depreciation account has been credited only for the depreciation expense for the period.

2. The Retained Earnings account has been charged for dividends of $158,000 and credited for the net income for the year.

The income statement for 2013 is as follows:
Sales	$1,980,000
Cost of sales	1,089,000
Gross profit	891,000
Operating expenses	670,000
Net income	$ 221,000

Instructions

(a) From the information above, prepare a statement of cash flows (indirect method) for Hartman, Inc. for the year ended December 31, 2013.

(b) From the information above, prepare a schedule of cash provided by operating activities using the direct method.