Hartman, Inc. has prepared the following comparative balance sheets for 2014 and
ID: 2500175 • Letter: H
Question
Hartman, Inc. has prepared the following comparative balance sheets for 2014 and 2015:
2015 2014
Cash $ 292,000 $ 153,000
Accounts receivable 149,000 117,000
Inventory 150,000 180,000
Prepaid expenses 18,000 27,000
Plant assets 1,275,000 1,050,000
Accumulated depreciation (450,000) (375,000)
Patent 153,000 174,000
$1,587,000 $1,326,000
Accounts payable $ 153,000 $ 168,000
Accrued liabilities 60,000 42,000
Mortgage payable — 450,000
Preferred stock 525,000 —
Additional paid-in capital—preferred 120,000 —
Common stock 600,000 600,000
Retained earnings 129,000 66,000
$1,587,000 $1,326,000
1. The Accumulated Depreciation account has been credited only for the depreciation expense for the period.
2. The Retained Earnings account has been charged for dividends of $148,000 and credited for the net income for the year.
The income statement for 2015 is as follows:
Sales revenue $1,980,000
Cost of sales 1,089,000
Gross profit 891,000
Operating expenses 680,000
Net income $ 211,000
Instructions
From the information above, prepare a schedule of cash provided by operating activities using the direct** method.
Explanation / Answer
Hartman, Inc. has prepared the following comparative balance sheets for 2014 and
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