Reference no: EM13862344
The following are Sullivan Corp.’s comparative balance sheet accounts at December 31, 2014 and 2013, with a column showing the increase (decrease) from 2013 to 2014.
Additional information:
1. On December 31, 2013, Sullivan acquired 25% of Myers Co.’s common stock for $275,000. On that date, the carrying value of Myers’s assets and liabilities, which approximated their fair values, was $1,100,000. Myers reported income of $140,000 for the year ended December 31, 2014. No dividend was paid on Myers’s common stock during the year.
2. During 2014, Sullivan loaned $300,000 to TLC, Co., an unrelated company. TLC made the first semi-annual principal repayment of $50,000, plus interest at 10%, on December 31, 2014.
3. On January 2, 2014, Sullivan sold equipment costing $60,000, with a carrying amount of $38,000, for $40,000 cash.
4. On December 31, 2014, Sullivan entered into a capital lease for an office building. The present value of the annual rental payments is $400,000, which equals the fair value of the building. Sullivan made the first rental payment of $600,000 when due on January 2, 2015.
5. Net income for 2014 was $370,000.
6. Sullivan declared and paid the following cash dividends for 2014 and 2013.
Instructions
Prepare a statement of cash flows for Sullivan Corp. for the year ended December 31, 2014, using the indirect method.
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