Condensed financial data of Pat Metheny Company for 2014 and 2013 are presented

Question

Condensed financial data of Pat Metheny Company for 2014 and 2013 are presented below.

PAT METHENY COMPANY COMPARATIVE BALANCE SHEET AS OF DECEMBER 31, 2014 AND 2013

2014

2013

$1,793

$1,105

1,756

1,306

1,584

1,919

1,894

1,703

(1,204

)

(1,169

)

1,300

1,466

$7,123

$6,330

$1,204

$785

211

248

1,408

1,648

1,898

1,697

2,402

1,952

$7,123

$6,330

PAT METHENY COMPANY
INCOME STATEMENT
FOR THE YEAR ENDED DECEMBER 31, 2014

$6,810

4,697

2,113

934

1,179

83

1,262

548

264

$450

Additional information:

During the year, $78 of common stock was issued in exchange for plant assets. No plant assets were sold in 2014.

Prepare a statement of cash flows using the indirect method.

2014

2013

Cash

$1,793

$1,105

Receivables

1,756

1,306

Inventory

1,584

1,919

Plant assets

1,894

1,703

Accumulated depreciation

(1,204

)

(1,169

)

Long-term investments (held-to-maturity)

1,300

1,466

$7,123

$6,330

Accounts payable

$1,204

$785

Accrued liabilities

211

248

Bonds payable

1,408

1,648

Capital stock

1,898

1,697

Retained earnings

2,402

1,952

$7,123

$6,330

Explanation / Answer

Pat Metheny Company

Statement of cash flows ( Indirect )

For the year ended December 31, 2014

$ $ Cash flows from operating activities Net income 714 Adjustments for non-cash and non-operating items Depreciation expense 35 Gain on sale of investments (83) (48) Operating profit before working capital changes 666 Increase in receivables (450) Decrease in inventory 335 Increase in accounts payable 419 Decrease in accrued liabilities (37) 267 Net cash flows from operating activities 933 Cash flows from investing activities Proceeds from sale of investments 249 Purchase of equipment (113) Net cash flows from investing activities 136 Cash flows from financing activities Issue of common stock 123 Dividends paid (264) Bonds payable retired (240) Net cash used in financing activities (381) Net increase in cash 688 Cash, December 31, 2013 1,105 Cash, December 31, 2014 1,793

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