The comparative balance sheet of Wedge Industries Inc. for December 31, 2014 and 2013 is as follows:

The following additional information is taken from the records:
1. Land was sold for $100.
2. Equipment was acquired for cash.
3. There were no disposals of equipment during the year.
4. The common stock was issued for cash.
5. There was a $260 credit to Retained Earnings for net income.
6. There was an $80 debit to Retained Earnings for cash dividends declared.
a. Prepare a statement of cash flows, using the indirect method of presenting cash flows from operating activities.
b. Was Wedge Industries Inc. net cash flow from operations more or less than net income? What is the source of thisdifference?

Transcribed Image Text:

Dec. 31, 2014 Dec. 31, 2013 Assets Cash 392 224 140 320 180 $128 160 Inventories 360 140 (24) $852 and otal. 1,208 Liabilities and Stockholders' Equity $ 140 24 80 200 Accounts payable (merchandise creditors) $128 40 100 Paid-in capital: Excess of issue price over par-common stock... 584 $852 $1,208