Question 1 (30 points) Use the Zcom Inc. financial statements and supplementary information given below to prepare a statement of cash flows for the year ended December 31, 2014, using the indirect method. 1 Additional Information: a. Purchased equipment for $36,000 cash. b. Sold the long-term investment on January 1, 2014 for $1,000. c. Sold equipment for $18,000 cash that had originally cost $55,500 and had $37,500 of accumulated depreciation. d. Issued $35,000 of bonds payable at face value. e. The short-term investment is a treasury bill that was purchased with maturity in 90 days. (select one) Statement of Cash Flows (select one) Cash flows from operating activities Adjust to reconcile net income to cash provided by oper. act.: Zcom Inc. Comparative Balance Sheet Information December 31 Assets 2014 2013 Cash 354,200 200,000 Short-term investments 66,000 55,000 Accounts receivable 57,700 87,000 Merchandise inventory 91,600 208,000 Long term investment 0 24,000 Equipment 180,500 200,000 Accumulated depreciation (142,500) (135,000) Total assets 607,500 639,000 Cash flows from investing activities Cash flows from financing activities Liabilities and Equity Accounts payable Dividends payable Bonds payable Share capital Retained earnings Total liabilities and equity Net increase (decrease) in cash Cash at beginning of year Cash at end of year 95,500 34,000 35,000 348,000 95,000 607,500 72,000 38,000 0 348,000 181,000 639,000 550,000 Zcom Inc. Income Statement For Year Ended December 31, 2014 Sales Cost Of Goods Sold 520,000 Depreciation expense 45,000 Other expenses 48,000 Loss on sale of long-term investment Net loss (613,000) (23,000) 86,000