Question Details

Prepare a statement of cash flows for the year ended 



1
Assuming a statement of cash flows is prepared, indicate the reporting of the transactions and events listed below by major categories on the statement. Use the following code letters to indicate the appropriate category under which the item would appear on the statement of cash flows.
	Code
Cash Flows From Operating Activities
	Add to Net Income	A
	Deduct from Net Income	D
Cash Flows From Investing Activities	IA
Cash Flows From Financing Activities	FA
							Category
	1.	Common stock is issued for cash at an amount above par value. 		
	2.	Merchandise inventory increased during the period.		
	3.	Depreciation expense recorded for the period.		
	4.	Building was purchased for cash.		
	5.	Bonds payable were acquired and retired at their carrying value.		
	6.	Accounts payable decreased during the period.		
	7.	Prepaid expenses decreased during the period.		
	8.	Treasury stock was acquired for cash.		
	9.	Land is sold for cash at an amount equal to book value.		
	10.	Patent amortization expense recorded for a period. 		


2
A comparative balance sheet for Rocker Company appears below:
ROCKER COMPANY
Comparative Balance Sheet
	Dec. 31, 2014	Dec. 31, 2013
Assets
Cash		$  34,000	$11,000
Accounts receivable	18,000	13,000
Inventory	25,000	17,000
Prepaid expenses	6,000	9,000
Long-term investments	-0-	17,000
Equipment	60,000	33,000
Accumulated depreciation—equipment	  (20,000)	(15,000)
	Total assets	$123,000	$85,000

Liabilities and Stockholders' Equity
Accounts payable	$  17,000	$  7,000
Bonds payable	36,000	45,000
Common stock	40,000	23,000
Retained earnings	    30,000	  10,000
	Total liabilities and stockholders' equity	$123,000	$85,000

Additional information:
1.	Net income for the year ending December 31, 2014 was $35,000.
2.	Cash dividends of $15,000 were declared and paid during the year.
3.	Long-term investments that had a cost of $17,000 were sold for $14,000.
4.	Sales for 2014 were $120,000.

Instructions
Prepare a statement of cash flows for the year ended December 31, 2014, using the indirect method.




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