Question

Chapter 10 Homework Financial Statements
Varney Corp.
Income Statement
Year Ended 12/31/2014
Revenues and Gains:
Sales Revenue					$1,118,000
Expenses and Losses:
Cost of Goods Sold			$ 614.600
Salaries and Wages Expense			206,800
Rent Expense			9,000
Depreciation Expense			4,000
Other Operating Expenses			123,180
Interest Expense			2,000		963,580
Net Income					$ 158,420
Varney Corp.
Comparative Balance Sheet Information
12/31/2013 & 12/31/2014
Assets:	12/31/2013	12/31/2014		Change
Cash	$ 85,800	$136,900		$ +51,100
Accounts Receivable	73,500	115,520		+42,020
Inventory	40,000	15,400		- 24,600
Prepaid Rent	3,000	0		-3,000
Operating Assets (Net)	0	196,000		+196,000
Total Assets	$202,300	$463,820		$+261,520
Liabilities and Stockholders’ Equity:
Accounts Payable	$ 51,500	$120,000		$ +68,500
Salaries & Wages Payable	900	6,000		+ 5,100
Interest Payable	500	0		- 500
Notes Payable	50,000	50,000		0
Paid-in Capital	75,000	125,000		+50,000
Retained Earnings	24,400	180,820		+156,420
Treasury Stock	0	(18,000)		-18,000
Total Liabilities & Stockholders’ Equity	$202,300	$463,820		$+261,520

Attached are the income statement and statement of stockholders’ equity for Varney Corp for the year ended 12/31/2014 and the comparative balance sheet information at 12/31/2013 and 12/31/2014. The following additional information is provided:

During 2014 Varney purchased land and a building through a $200,000 cash purchase. There were no disposals of operating assets during 2014. The building is the only depreciable operating asset that Varney owned during 2014

During 2014, Varney issued 5,000 shares of its own common stock for $50,000

During 2014, Varney repurchased 2,000 shares of its own common stock for $18,000

The other operating expenses were paid in full during 2014

During 2014, $2,000 of dividends were paid to stockholders

An equity statement is not shown because all relevant information to the statement of cash flows has been provided

Required:

Prepare a statement of cash flows for Varney Corp. for the year ended 12/31/2014 using the “indirect” method of presenting operating cash flows.