Frank Worldwide Inc. had the balance sheet shown below at December 31, 2013.
FRANK WORLDWIDE INC.
BALANCE SHEET DECEMBER 31, 2013
CURRENT ASSETS
Cash $ 31,000
Accounts receivable 56,800
FIXED ASSETS
Investments 86,000
Land 138,500
Plant assets (net) 66,000
Total Assets $ 378,300
CURRENT LIABILITIES
Accounts payable $ 61,000
LONG-TERM DEBT
Notes payable (long-term) 76,000
SHAREHOLDER EQUITY
Common stock 200,000
Retained earnings 41,300
Total Liabilities & Equity $ 378,300
During 2014, the following occurred.
Frank Worldwide Inc. sold part of its investment portfolio for $20,000.This transaction resulted in a loss of $2,100 for the firm. This investment is classified as available-for-sale.
2. A tract of land was purchased for $25,000 cash.
3. Long-term notes payable in the amount of $30,000 were retired before maturity by paying 30,000 cash.
4. An additional $43,000 in common stock was issued at par.
5. Dividends of $20,000 were declared and paid to stockholders.
6. Net income for 2014 was $21,000 after allowing for depreciation of $9,000.
7. Land was purchased through the issuance of $61,000 in notes payable.
8. At December 31, 2014, Cash was $46,100, Accounts Receivable was $61,800, and Accounts Payable remained at $61,000.
Instructions
(a) Prepare a statement of cash flows for 2014 by the indirect method.
(b) Prepare a classified balance sheet as it would appear at December 31, 2014.