Hartman Inc statement of cash flows schedule of cash Effects items on statement of cash flows Answer

Hartman, Inc. has prepared the following comparative balance sheets for 2012 and 2013:

                                                                                                          2013                      2012     

         Cash                                                                                     $   287,000             $  153,000

         Accounts receivable                                                                 149,000                 117,000

         Inventory                                                                                   150,000                 180,000

         Prepaid expenses                                                                       18,000                   27,000

         Plant assets                                                                            1,280,000              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

Additional information:

• The Accumulated Depreciation account has been credited only for the depreciation expense for the period.
• The Retained Earnings account has been charged for dividends of $158,000 and credited for the net income for the year.

• The income statement for 2013 is as follows:

   

  Sales                                                   $1,980,000

  Cost of sales                                         1,089,000

  Gross profit                                              891,000

  Operating expenses                                 670,000

  Net income                                         $   221,000

   

  Required:

  (1)    From the information above, prepare a statement of cash flows using the indirect method for Hartman, Inc. for the year ended December 31, 2013.

  (2)    From the information above, prepare a schedule of cash provided by operating activities using the direct method.