preparing the Statement of Cash Flows: Indirect Method
e8A. Keeper Corporation’s income statement for the year ended June 30, 2014, and its comparative balance sheets for June 30, 2014 and 2013 follow.
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Keeper Corporation Income Statement
                      For the Year ended June 30, 2014                      Â
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| Sales | $234,000 |
| Cost of goods sold | 156,000 |
| Gross margin | $ Â 78,000 |
| Operating expenses | 45,000 |
| Operating income | $ Â 33,000 |
| Interest expense | 2,800 |
| Income before income taxes | $ Â 30,200 |
| Income taxes expense | 12,300 |
| Net income | $ Â 17,900 |
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Keeper Corporation Comparative Balance Sheets
                                             June 30, 2014 and 2013                                               Â
2014Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â 2013
Assets
Cash                                                                          $  69,900                 $  12,500
Accounts receivable (net)Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â 21,000Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â 26,000
Inventory                                                                      43,400                     48,400
Prepaid expenses                                                           3,200                       2,600
Furniture                                                                       55,000                     60,000
Accumulated depreciation—furniture                       (9,000)                                                                                                  (5,000) Total assets                                                                                  $183,500                                                                                  $144,500
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Liabilities and Stockholders’ equity
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| Accounts payable | $ Â 13,000 | Â | $ Â 14,000 |
| Income taxes payable | 1,200 | Â | 1,800 |
| Notes payable (long-term) | 37,000 | Â | 35,000 |
| Common stock, $10 par value | 115,000 | Â | 90,000 |
| Retained earnings | 17,300 | Â | 3,700 |
| Total liabilities and stockholders’ equity | $183,500 |  | $144,500 |
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Keeper issued a $22,000 note payable for purchase of furniture; sold at carrying value furniture that cost $27,000 with accumulated depreciation of $15,300; recorded depreciation on the furniture for the year, $19,300; repaid a note in the amount of
$20,000; issued $25,000 of common stock at par value; and paid dividends of $4,300. Prepare Keeper’s statement of cash flows for the year 2014 using the indirect method.