Problem 14-21A (Algo) Using financial statements to prepare a statement of cash flows-direct method LO 14-2, 14-3, 14-4 The following financial statements were drawn from the records of Walton Shoes: Balance Sheets As of December 31. Year 2 Year 1 $121,066 $ 27,850 57,104 66,120 125,546 113,590 0 31,000 151,100 (68,629) 87,500 257,600 (138,620) 57,000 $414,540 Assets Cash Accounts receivable Merchandise inventory Notes receivable Equipment Accumulated depreciation-equipment Land Total assets Liabilities Accounts payable Salaries payable Utilities payable Interest payable Notes payable (long-term) Common stock Retained earnings Total liabilities and equity Income Statement For the Year Ended December 31, Year 2 Sales revenue Cost of goods sold Gross margin Operating expenses Salaries expense Depreciation expense Utilities expense Operating income Nonoperating items Interest expense Loss on the sale of equipment Net income 28,488 739 0 $473,687 $ 40,211 $ 46,530 22,790 1,478 1,670 0 62,500 303,300 100,949 241,700 37,872 $473,687 $414,540 $589,910 (292,920) 296,990 (187,100) (15,299) (12,640) 81,951 (3,325) (1,170) $ 77,456 Additional Information 1. Sold equipment costing $106,500 with accumulated depreciation of $85,290 for $20,040 cash. 2. Paid a $14,379 cash dividend to owners."