P12-5 (Supplement B) Preparing a Statement of Cash Flows with Gain on Sale of Equipment (Indirect Method) LO12-2, 12-4, 12-6 XS Supply Company is developing its annual financial statements at December 31, 2014. The statements are complete except for the statement of cash flows. The completed comparative balance sheets and income statement are summarized: 2014 2013 Balance sheet at December 31 Cash $ 34,000 $ 29,000 Accounts receivable 35,000 28,000 Merchandise inventory 41,000 38,000 Property and equipment 121,000 100,000 Less: Accumulated depreciation (30,000) (25,000) $ 201,000 $ 170,000 Accounts payable $ 36,000 $ 27,000 Wages payable 1,200 1,400 Note payable, long-term 38,000 44,000 Contributed capital 88,600 72,600 Retained earnings 37,200 25,000 $ 201,000 $ 170,000 Income statement for 2014 Sales $ 120,000 Gain on sale of equipment 1,000 Cost of goods sold 70,000 Other expenses 38,800 Net income $ 12,200 Additional Data: a. Bought equipment for cash, $31,000. Sold equipment with original cost of $10,000, accumulated depreciation of $7,000, for $4,000 cash. b. Paid $6,000 on the long-term note payable. c. Issued new shares of stock for $16,000 cash. d. No dividends were declared or paid. e. Other expenses included depreciation, $12,000; wages, $13,000; taxes, $6,000; and other, $7,800. f. Accounts payable includes only inventory purchases made on credit. Because there are no liability accounts relating to taxes or other expenses, assume that these expenses were fully paid in cash. Required: 1 Prepare the statement of cash flows for the year ended December 31, 2014, using the indirect method. (List cash outflows as negative amounts.) Possible input areas are shaded. XS SUPPLY COMPANY Statement of Cash Flows For the Year Ended December 31, 2014 Cash flows from operating activities: Adjustments to reconcile net income to net cash provided by operating activities: - Net cash provided by operating activities - Cash flows from investing activities: - Cash flows from financing activities: - $ -

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P12-5 (Supplement B) Preparing a Statement of Cash Flows with Gain on Sale of Equipment (Indirect Method) LO12-2, 12-4, 12-6           XS Supply Company is developing its annual financial statements at December 31, 2014. The statements are complete except for the   statement of cash flows. The completed comparative balance sheets and income statement are summarized:             2014 2013       Balance sheet at December 31         Cash  $ 34,000  $ 29,000       Accounts receivable  35,000  28,000       Merchandise inventory  41,000  38,000       Property and equipment  121,000  100,000       Less: Accumulated depreciation  (30,000)  (25,000)                $ 201,000  $ 170,000               Accounts payable  $ 36,000  $ 27,000       Wages payable 1,200 1,400       Note payable, long-term 38,000 44,000       Contributed capital 88,600 72,600       Retained earnings 37,200 25,000                $ 201,000  $ 170,000               Income statement for 2014         Sales  $ 120,000        Gain on sale of equipment 1,000        Cost of goods sold 70,000        Other expenses 38,800                Net income  $ 12,200              Additional Data:       a. Bought equipment for cash, $31,000.        Sold equipment with original cost of $10,000, accumulated depreciation of $7,000, for $4,000 cash.   b. Paid $6,000 on the long-term note payable.       c. Issued new shares of stock for $16,000 cash.       d. No dividends were declared or paid.       e. Other expenses included depreciation, $12,000; wages, $13,000; taxes, $6,000; and other, $7,800.   f. Accounts payable includes only inventory purchases made on credit. Because there are no liability accounts relating to taxes or other expenses,    assume that these expenses were fully paid in cash.               Required:        1 Prepare the statement of cash flows for the year ended December 31, 2014, using the indirect method.    (List cash outflows as negative amounts.)        Possible input areas are shaded.                XS SUPPLY COMPANY      Statement of Cash Flows      For the Year Ended December 31, 2014      Cash flows from operating activities:                Adjustments to reconcile net income to net cash provided by operating activities:                                                           -      Net cash provided by operating activities   -      Cash flows from investing activities:                                   -      Cash flows from financing activities:                                   -                         $ -

	2018	2017
Cash and cash equivalents	$55,000	$33,000
Net patient accounts receivable	20,000	30,000
Inventories	20,000	11,000
Total current assets	$95,000	$74,000
Property and Equipment	290,000	70,000
Less: Accumulated depreciation	(14,000)	(6,000)
Net property and equipment	276,000	64,000
Long-term investments	27,000	0
Total assets	$398,000	$138,000

Accounts payable	$28,000	$12,000
Accrued expenses	6,000	8,000
Total current liabilities	34,000	20,000
Long-term debt	130,000	20,000
Total Liabilities	$164,000	$40,000

Net Assets	234,000	98,000
Total liabilities and equity	$398,000	$138,000

Account	12/31/15 Ending Balance
Cash	50,000
Accounts Receivable	175,000
Inventory	126,00
Equipment	480,000
Accumulated Depreciation	90,000
Accounts Payable	156,000
Short-term Notes Payable	12,000
Long-term Notes Payable	200,000
Common Stock	235,000
Retained Earnings	solve

	Project 1	Project 2	Project 3
Purchase Price	$80,000	$175,000	$22,700
Required Rate of Return	6%	8%	12%
Time Period	3 years	5 years	2 years
Cash Flows â Year 1	$48,000	$85,000	$15,000
Cash Flows â Year 2	$36,000	$74,000	$12,000
Cash Flows â Year 3	$22,000	$38,000	N/A
Cash Flows â Year 4	N/A	$26,800	N/A
Cash Flows â Year 5	N/A	$19,000	N/A

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P12-5 (Supplement B) Preparing a Statement of Cash Flows with Gain on Sale of Equipment (Indirect Method) LO12-2, 12-4, 12-6

XS Supply Company is developing its annual financial statements at December 31, 2014. The statements are complete except for the
statement of cash flows. The completed comparative balance sheets and income statement are summarized:

		2014	2013
	Balance sheet at December 31
	Cash	$ 34,000	$ 29,000
	Accounts receivable	35,000	28,000
	Merchandise inventory	41,000	38,000
	Property and equipment	121,000	100,000
	Less: Accumulated depreciation	(30,000)	(25,000)

		$ 201,000	$ 170,000

	Accounts payable	$ 36,000	$ 27,000
	Wages payable	1,200	1,400
	Note payable, long-term	38,000	44,000
	Contributed capital	88,600	72,600
	Retained earnings	37,200	25,000

		$ 201,000	$ 170,000

	Income statement for 2014
	Sales	$ 120,000
	Gain on sale of equipment	1,000
	Cost of goods sold	70,000
	Other expenses	38,800

	Net income	$ 12,200

Additional Data:
a.	Bought equipment for cash, $31,000.
	Sold equipment with original cost of $10,000, accumulated depreciation of $7,000, for $4,000 cash.
b.	Paid $6,000 on the long-term note payable.
c.	Issued new shares of stock for $16,000 cash.
d.	No dividends were declared or paid.
e.	Other expenses included depreciation, $12,000; wages, $13,000; taxes, $6,000; and other, $7,800.
f.	Accounts payable includes only inventory purchases made on credit. Because there are no liability accounts relating to taxes or other expenses,
	assume that these expenses were fully paid in cash.

Required:
1	Prepare the statement of cash flows for the year ended December 31, 2014, using the indirect method.
	(List cash outflows as negative amounts.)
	Possible input areas are shaded.

	XS SUPPLY COMPANY
	Statement of Cash Flows
	For the Year Ended December 31, 2014
	Cash flows from operating activities:

	Adjustments to reconcile net income to net cash provided by operating activities:






			-
	Net cash provided by operating activities		-
	Cash flows from investing activities:



			-
	Cash flows from financing activities:



			-


			$ -