Home Free Inc. had the following financial information for 2013. Â Prepare the statement of cash flows using the indirect method for the operating section. Â Briefly analyze the statement -- what do you learn from it?
Additional information: Â Old equipment was sold for $1300 cash when the original cost of the equipment sold was $24,900. No new equipment was purchased in 2013. Land was purchased with cash. Assume any new stock was issued for cash. Â Dividends were paid in Cash.
| Home Free, Inc. Income Statement For Year Ended December 31, 2013 | ||
|---|---|---|
| Â | Â | Â |
| Revenue: | Â | Â |
| Â Sales Revenue | Â | 280,000 |
| Â | Â | Â |
| Expenses: | Â | Â |
| Depreciation Expense | 32,000 | Â |
| Salaries Expense | 100,000 | Â |
| Rent Expense | 23,500 | Â |
| Utilities Expense | 5,700 | Â |
| Loss on Sale of Equipment | 600 | Â |
| Â Total Expenses | Â | 161,800 |
| Â | Â | Â |
| Net Income | Â | 118,200 |
Â
| Home Free, Inc. Balance Sheet December 31, 2013 | ||||||
|---|---|---|---|---|---|---|
| Â | Â | Â | Â | Â | Â | Â |
| Assets: | 2013 | 2012 | Â | Liabilities & Equity: | 2013 | 2012 |
| Cash | 370,300 | 429,600 | Â | Accounts Payable | 14,000 | 18,500 |
| Accounts Receivable | 80,000 | 125,000 | Â | Taxes Payable | 3,750 | 2,200 |
| Supplies | 450 | 700 | Â | Â Total Current Liabilities | 17,750 | 20,700 |
| Inventory | 82,000 | 80,000 | Â | Long Term Notes Payable | Â - | 38,000 |
| Â Total Current Assets | 532,750 | 635,300 | Â | Â | Â | Â |
| Â | Â | Â | Â | Common Stock | 150,000 | 150,000 |
| Equipment | 85,000Â | 109,900Â | Â | Paid in capital in excess of par value, common stock | 310,000 | 310,000 |
| Less: Accum. Depreciation | (67,000) | (58,000) | Â | Â Total Paid in Capital | 460,000 | 460,000 |
| Land | 145,000 | - | Â | Â | Â | Â |
| Â Total Plant Assets | 18,000 | 51,900 | Â | Retained Earnings | 218,000 | 168,500 |
| Â | Â | Â | Â | Â | Â | Â |
| TOTAL ASSETS | 695,750 | 687,200 | Â | TOTAL LIABILITIES AND EQUITY | 695,750 | 687,200 |
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| Description | Amount | Total |
|---|---|---|
| Subcategory,Cash Flows from Operating Activities: | ||
| Subcategory,Adjustments to reconcile net income to net cash | ||
| Single line | Single line | |
| Total Adjustments | Single lineSingle line | |
| Single line | ||
| Subcategory,Cash Flows from Investing Activities: | ||
| Single line | Single line | |
| Single line | ||
| Subcategory,Cash Flows from Financing Activities: | ||
| Single line | Single line | |
| Single lineSingle line | ||
| Single line | ||
| Single line | ||
| Single line | ||
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