The Question

Using the financial data below, prepare a statement of cash flows for the
year ended December 31, 2014 for Summer Peebles, Inc. using the indirect
method.

Summer Peebles, Inc.

Income Statement Year Ending December 31, 2014
Sales $1,000.00
Cost of Goods Sold ($650.00)
Depreciation Expense ($100.00)
Sales and General Expense ($100.00)
Interest Expense ($50.00)
Income Tax Expense ($40.00)
Net Income $60.00

Summer Peebles, Inc.

Balance Sheets as of December 31, 2013 and 2014
Assets 2013 2014
Cash $50.00 $60.00
Accounts Receivable, Net $500.00 $520.00
Inventory $750.00 $770.00
Current Assets $1,300.00 $1,350.00
Fixed Assets, Net $500.00 $550.00
Total Assets $1,800.00 $1,900.00
Liabilities and Equity
Notes Payable to Banks $100.00 $75.00
Accounts Payable $590.00 $615.00
Interest Payable $10.00 $20.00
Current Liabilities $700.00 $710.00
Long-Term Debt $300.00 $350.00
Deferred Income Tax $300.00 $310.00
Capital Stock $400.00 $400.00

The Solution