Financial information for Price Company at December 31, 2014, and for the year then ended, are presented below:
Additional information:

1. On December 31, 2013, Newton acquired 25 percent of Trent Corporation’s common stock for $137,500. On that date, the carrying value of Trent’s net assets and liabilities (which approximated fair value) was $550,000. Trent reported income of $60,000 for the year ended December 31, 2014. No dividend was paid on Trent’s common stock during the year.

2. During 2014, Newton loaned $150,000 to Dalton Company, an unrelated entity. Dalton made the first semi-annual principal payment of $15,000, plus interest at 10 percent, on October 1, 2014.

3. On January 2, 2014, Newton sold equipment costing $30,000, with a carrying value of $17,500, for $20,000 cash.

4. On January 2, 2014, Newton 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. Newton made the first lease payment of $30,000 when due on January 2, 2015.

5. Newton’s net income for 2014 was $180,000.

6. Newton declared and paid cash dividends for 2014 and 2013 as follows:

Required:
Prepare the statement of cash flows using the indirect method.

Question

Financial information for Price Company at December 31, 2014, and for the year then ended, are presented below:
  Additional information:

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

Required:
Prepare the statement of cash flows using the indirect method.

Quizplus · Accepted Answer

The Answer of Financial information for Price Company at December 31, 2014, and for the year then ended, are presented below:
  Additional information:

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

Required:
Prepare the statement of cash flows using the indirect method.

Financial Information for Price Company at December 31, 2014, and for the Year