The following is Grafton Corporation's comparative balance sheets for 2014 and 2013:

Additional information:
1.On December 31,2013,Grafton acquired 25 percent of Elkins Corporation's common stock for $137,500.On that date,the carrying value of Elkins' net assets and liabilities (which approximated fair value)was $550,000.Elkins reported income of $60,000 for the year ended December 31,2014.No dividend was paid on Elkins' common stock during the year.
2.During 2014,Grafton loaned $150,000 to Beckley Company,an unrelated entity.Beckley made the first semi-annual principal payment of $15,000,plus interest at 10 percent,on October 1,2014.
3.On January 2,2014,Grafton sold equipment costing $30,000,with a carrying value of $17,500,for $20,000 cash.
4.On January 2,2014,Grafton entered into a capital lease for an office building.The present value of the annual rental payments is $200,000,which equals the fair value of the building.Grafton made the first lease payment of $30,000 when due on January 2,2015.
5.Grafton's net income for 2014 was $180,000.
6.Grafton declared and paid cash dividends for 2014 and 2013 as follows:

Required:
Prepare a statement of cash flows for Grafton Company for 2014 using the indirect method.Include relevant supplemental schedules.

Question

The following is Grafton Corporation's comparative balance sheets for 2014 and 2013:
  
Additional information:
1.On December 31,2013,Grafton acquired 25 percent of Elkins Corporation's common stock for $137,500.On that date,the carrying value of Elkins' net assets and liabilities (which approximated fair value)was $550,000.Elkins reported income of $60,000 for the year ended December 31,2014.No dividend was paid on Elkins' common stock during the year.
2.During 2014,Grafton loaned $150,000 to Beckley Company,an unrelated entity.Beckley made the first semi-annual principal payment of $15,000,plus interest at 10 percent,on October 1,2014.
3.On January 2,2014,Grafton sold equipment costing $30,000,with a carrying value of $17,500,for $20,000 cash.
4.On January 2,2014,Grafton entered into a capital lease for an office building.The present value of the annual rental payments is $200,000,which equals the fair value of the building.Grafton made the first lease payment of $30,000 when due on January 2,2015.
5.Grafton's net income for 2014 was $180,000.
6.Grafton declared and paid cash dividends for 2014 and 2013 as follows:
  
Required:
Prepare a statement of cash flows for Grafton Company for 2014 using the indirect method.Include relevant supplemental schedules.

Quizplus · Accepted Answer

The Answer of The following is Grafton Corporation's comparative balance sheets for 2014 and 2013:
  
Additional information:
1.On December 31,2013,Grafton acquired 25 percent of Elkins Corporation's common stock for $137,500.On that date,the carrying value of Elkins' net assets and liabilities (which approximated fair value)was $550,000.Elkins reported income of $60,000 for the year ended December 31,2014.No dividend was paid on Elkins' common stock during the year.
2.During 2014,Grafton loaned $150,000 to Beckley Company,an unrelated entity.Beckley made the first semi-annual principal payment of $15,000,plus interest at 10 percent,on October 1,2014.
3.On January 2,2014,Grafton sold equipment costing $30,000,with a carrying value of $17,500,for $20,000 cash.
4.On January 2,2014,Grafton entered into a capital lease for an office building.The present value of the annual rental payments is $200,000,which equals the fair value of the building.Grafton made the first lease payment of $30,000 when due on January 2,2015.
5.Grafton's net income for 2014 was $180,000.
6.Grafton declared and paid cash dividends for 2014 and 2013 as follows:
  
Required:
Prepare a statement of cash flows for Grafton Company for 2014 using the indirect method.Include relevant supplemental schedules.

The Following Is Grafton Corporation's Comparative Balance Sheets for 2014