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

$1,808

$1,098

1,755

1,302

1,593

1,911

1,896

1,707

(1,196

)

(1,178

)

1,294

1,465

$7,150

$6,305

$1,217

$788

210

233

1,417

1,632

1,896

1,695

2,410

1,957

$7,150

$6,305

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

$6,805

4,696

2,109

939

1,170

93

1,263

540

270

$453

Additional information:

During the year, $61 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. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)

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

2014

2013

Cash

$1,808

$1,098

Receivables

1,755

1,302

Inventory

1,593

1,911

Plant assets

1,896

1,707

Accumulated depreciation

(1,196

)

(1,178

)

Long-term investments (held-to-maturity)

1,294

1,465

$7,150

$6,305

Accounts payable

$1,217

$788

Accrued liabilities

210

233

Bonds payable

1,417

1,632

Capital stock

1,896

1,695

Retained earnings

2,410

1,957

$7,150

$6,305

Explanation / Answer

Solution:

Cashflow Statement Cash flow from Operating Activities Net Income                          723 Add: Depreciation                               18 Less: Gain on sale of Investments -                          93 Add: Income tax expense                              -   Less: Increase in receivables ( 453 ) Add: Decrease in inventory                          318 Add: increase in accounts payable                          429 Les: Decrease in accured liabilities     ( 23 ) Cash flow from Operating Activities                          919 Cash flow from invetsing activities Purchase of Plant assets ( 128 ) Sale of Long term investments                          264 Cash flow from invetsing activities                          136 Cashflow from financing activities Issue of common stock                          140 Cash dividends (   270 ) Redemption of bonds payable (    215 ) Cashflow from financing activities (    345 ) Beginning cash balance                       1,098 Changes in cash                          710 Ending balance                       1,808

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