Problem 14-14 Prepare and Interpret a Statement of Cash Flows [LO14-1, LO14-2] A comparative balance sheet for Lomax Company containing data for the last two years is as follows Lomax Company Comparative Balance Sheet This Year Last Year Assets Current assets: Cash and cash equivalents $ 87,000 62,800 650,000 436,000 13,000 1,359,000 1,161,800 2,450,000 1,864,000 574,400 1,815,800 1,289,600 178,000 78,000 $3,424,400 $2,707,400 622,000 627,200 22,800 Accounts receivable Inventory Prepaid expenses Total current assets Property, plant, and equipment 634,200 Less accumulated depreciation Net property, plant, and equipment Long-term investments Loans to subsidiaries Total assets Liabilities and Stockholders' Equity Cu 113,600 136,000 rrent liabilities Accounts payable Accrued liabilities Income taxes payable $ 895,600 $ 586, 000 56,400 130,800 773,200 448,000 1,784,000 1,221,200 34,600 153,800 1,084,000 700,000 Total current liabilities Bonds payable Total liabilities Stockholders' equity: Common stock 1,122,000 ,016,000 470,200 1,640,400 1,486,200 $3,424,400 $2,707,400 518,400 Retained earnings Total stockholders' equity Total 1iabilities and stockholders' equity The following additional information is available about the company's activities during this year: a. The company declared and paid a cash dividend this year. b. Bonds with a principal balance of $396,000 were repaid during this year. c. Equipment was sold during this year for $78,000. The equipment had cost $162,000 and had $59,200 in accumulated depreciation on the date of sale d. Long-term investments were sold during the year for $142,000. These investments had cost $64,400 when purchased several years ago e. The subsidiaries did not repay any outstanding loans during the year f. Lomax did not repurchase any of its own stock during the year. The company reported net income this year as follows: Sales Cost of goods sold Gross margin Selling and administrative expenses Net operating income Nonoperating items: $3,320,000 2,058,400 1,261,600 1,014,800 246,800 Gain on sale of investments $ 77,600 24,800 52,800 299,600 96,000 $ 203,600 Loss on sale of equipment Income before taxes Income taxes Net income Required Using the indirect method, prepare a statement of cash flows for this year. (List any deduction in cash outflows as negative amounts.) Lomax Company Statement of Cash Flows Operating activities: Investing activities: Financing activities Beginning cash and cash equivalents Ending cash and cash equivalents