The comparative balance sheet of Coulson, Inc. at December 31, 2014 and 2013, is as follows:

The comparative balance sheet of Coulson, Inc. at December 31, 2014 and 2013, is as follows:






Dec. 31, 2014 Dec. 31, 2013
Assets
Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 300,600 $ 337,800
Accounts receivable (net) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 704,400 609,600
Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 918,600 865,800
Prepaid expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18,600 26,400
Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 990,000 1,386,000
Buildings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,980,000 990,000
Accumulated depreciation—buildings . . . . . . . . . . . . . . . . . . . . . (397,200) (366,000)
Equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 660,600 529,800
Accumulated depreciation—equipment . . . . . . . . . . . . . . . . . . . . (133,200) (162,000)
$5,042,400 $4,217,400
Liabilities and Stockholders’ Equity
Accounts payable (merchandise creditors) . . . . . . . . . . . . . . . . . . $ 594,000 $ 631,200
Income taxes payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26,400 21,600
Bonds payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 330,000 0
Common stock, $20 par . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 320,000 180,000
Paid-in capital: Excess of issue price over par—common stock . . . . . . . . 950,000 810,000
Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,822,000 2,574,600
$5,042,400 $4,217,400

The noncurrent asset, noncurrent liability, and stockholders’ equity accounts for 2014 are as follows:


ACCOUNT Land ACCOUNT NO.
Balance
Date Item Debit Credit Debit Credit
2014
Balance
Realized $456,000 cash
 from sale
1
20
Jan.
Apr.
1,386,000
396,000 990,000
ACCOUNT Buildings ACCOUNT NO.
Balance
Date Item Debit Credit Debit Credit
2014
Balance
Acquired for cash
1
20
Jan.
Apr.
990,000
990,000 1,980,000
ACCOUNT Accumulated Depreciation—Buildings ACCOUNT NO.
Balance
Date Item Debit Credit Debit Credit
2014
Balance
Depreciation for year
1
31
Jan.
Dec.
366,000
31,200 397,200
ACCOUNT Equipment ACCOUNT NO.
Balance
Date Item Debit Credit Debit Credit
2014
Balance
Discarded, no salvage
Purchased for cash
1
26
11
Jan.
Aug.
529,800
463,800
660,600
66,000
196,800
ACCOUNT Accumulated Depreciation—Equipment ACCOUNT NO.
Balance
Date Item Debit Credit Debit Credit
2014
Balance
Equipment discarded
Depreciation for year
1
26
31
Jan.
Dec.
162,000
96,000
37,200 133,200
66,000
ACCOUNT Bonds Payable ACCOUNT NO.
Balance
Date Item Debit Credit Debit Credit
2014
May 1 Issued 20-year bonds 330,000 330,000
ACCOUNT Common Stock, $10 par ACCOUNT NO.
Balance
Date Item Debit Credit Debit Credit
2014
Balance
Issued 7,000 shares of common
 stock for $40 per share
1
7
Jan.
Dec.
180,000
140,000 320,000
ACCOUNT Paid-In Capital in Excess of Par—Common Stock ACCOUNT NO.
Balance
Date Item Debit Credit Debit Credit
2014
Balance
Issued 7,000 shares of common
 stock for $40 per share
1
7
Jan.
Dec.
810,000
140,000 950,000
ACCOUNT Retained Earnings ACCOUNT NO.
Balance
Date Item Debit Credit Debit Credit
2014
Balance
Net income
Cash dividends
1
31
31
Jan.
Dec.
2,574,600
2,901,200
2,822,000

Instructions
Prepare a statement of cash flows, using the indirect method of presenting cash flows from operating activities.


Answer:




COULSON INC.
Statement of Cash Flows
For the Year Ended December 31, 2014
Cash flows from operating activities:
Net income $ 326,600
Adjustments to reconcile net income to
net cash flow from operating activities:
Depreciation 68,400
Gain on sale of land (60,000)
Changes in current operating assets
and liabilities:
Increase in accounts receivable (94,800)
Increase in inventories (52,800)
Decrease in prepaid expenses 7,800
Decrease in accounts payable (37,200)
Increase in income taxes payable 4,800
Net cash flow from operating activities $ 162,800
Cash flows from investing activities:
Cash received from sale of land $ 456,000
Less: Cash paid for acquisition
of building $990,000
Cash paid for purchase
of equipment 196,800 1,186,800
Net cash flow used for investing activities (730,800)
Cash flows from financing activities:
Cash received from issuance of
bonds payable $330,000
Cash received from issuance of
common stock 280,000 $ 610,000
Less cash paid for dividends 79,200
Net cash flow from financing activities 530,800
Decrease in cash $ (37,200)
Cash at the beginning of the year 337,800
Cash at the end of the year $ 300,600
COULSON INC.
Spreadsheet (Work Sheet) for Statement of Cash Flows
For the Year Ended December 31, 2014
Account Title
Balance
Dec. 31, 2013
Transactions Balance
Debit Credit Dec. 31, 2014
Cash 337,800 (p) 37,200 300,600
Accounts receivable (net) 609,600 (i) 94,800 704,400
Inventories 865,800 (h) 52,800 918,600
Prepaid expenses 26,400 (g) 7,800 18,600
Land 1,386,000 (m) 396,000 990,000
Buildings 990,000 (l) 990,000 1,980,000
Accum. depr.—buildings (366,000) (f) 31,200 (397,200)
Equipment 529,800 (j) 196,800 (k) 66,000 660,600
Accum. depr.—equipment (162,000) (k) 66,000 (e) 37,200 (133,200)
Accounts payable (631,200) (d) 37,200 (594,000)
Income taxes payable (21,600) (c) 4,800 (26,400)
Bonds payable 0 (n) 330,000 (330,000)
Common stock, $20 par (180,000) (o) 140,000 (320,000)
Paid-in capital in excess of
par—common stock (810,000) (o) 140,000 (950,000)
Retained earnings (2,574,600) (b) 79,200 (a) 326,600 (2,822,000)
Totals 0 1,516,800 1,516,800 0
Operating activities:
Net income (a) 326,600
Depreciation—equipment (e) 37,200
Depreciation—buildings (f) 31,200
Gain on sale of land (m) 60,000
Increase in accts. receivable (i) 94,800
Increase in inventories (h) 52,800
Decrease in prepaid expenses (g) 7,800
Decrease in accounts payable (d) 37,200
Increase in income taxes
payable (c) 4,800
Investing activities:
Purchase of equipment (j) 196,800
Acquisition of building (l) 990,000
Sale of land (m) 456,000
Financing activities:
Payment of cash dividends (b) 79,200
Issuance of bonds payable (n) 330,000
Issuance of common stock (o) 280,000
Net decrease in cash (p) 37,200
Totals 1,510,800 1,510,800