Harlan Mining Co. has recently decided to go public and has hired you as an independent CPA. One statement that the enterprise is anxious to have prepared is a statement of cash flows. Financial statements of Harlan Mining Co. for 2015 and 2014 are provided below. BALANCE SHEETS
12/31/2015 12/31/2014
Cash $ 306,000 $ 144,000
Short-term Investment $0 $ 264,000
Accounts receivable 270,000 162,000
Inventory 288,000 360,000
Property, plant and equipment $ 456,000 $ 408,000
Less accumulated depreciation (240,000) (180,000)
$1,080,000 $1,158,000
Accounts payable $ 132,000 $ 72,000
Accrued liabilities 264,000 294,000
Bonds payable 270,000 450,000
Common stock 162,000 162,000
Retained earnings 252,000 180,000
$1,080,000 $1,158,000
INCOME STATEMENT
For the Year Ended December 31, 2015
Sales revenue $ 6,300,000
Cost of sales 5,328,000
Gross profit 972,000
Selling and administrative expenses 648,000
Income from operations 324,000
Less: Loss on sale of investments 36,000
Income before taxes 288,000
Income tax expense 72,000
Net income $216,000
The following additional data were provided:
1. Cash dividends for the year 2015 were $144,000.
2. During the year, no plant assets are sold. All new plant assets are purchased by cash.
3. All depreciation expense is included in the selling expense category.
Prepare a complete statement of cash flows for the year ended Dec. 31, 2015 using indirect method.

Harlan Mining Co.

Statement of Cash Flows for the year ended December 31, 2015

Operating activities:

Net income                                       $216,000

Add non-cash expenses:

Loss on sale of investments               36,000

Depreciation on equipment               60,000

Changes in working capital:

Accounts receivable                        -108,000

Inventory                                            72,000

Accounts payable                             60,000

Accrued liabilities                            -30,000

Net cash from operations           $306,000

Investing activities:

Short-term Investment               $228,000

Property, plant and equipment     -48,000

Net cash from investments        $180,000

Financing activities;

Bonds payable repaid               -$180,000

Cash dividends paid                    -144,000

Net cash from financing          -$324,000

Net cash inflows                        $162,000

Explanation:

a) Data and Calculations:

Financial statements of Harlan Mining Co. for 2015 and 2014 are provided below.

BALANCE SHEETS

                                                    12/31/2015   12/31/2014      Change

Cash                                            $ 306,000    $ 144,000    +$162,000

Short-term Investment                            $0   $ 264,000    -$264,000

Accounts receivable                      270,000       162,000      +108,000

Inventory                                        288,000      360,000        -72,000

Property, plant and equipment $ 456,000   $ 408,000       +48,000

Less accumulated depreciation  (240,000)     (180,000)      (60,000)

                                                  $1,080,000  $1,158,000

Accounts payable                       $ 132,000     $ 72,000    +$60,000

Accrued liabilities                          264,000     294,000       -30,000

Bonds payable                              270,000     450,000      -180,000

Common stock                              162,000     162,000                   0

Retained earnings                        252,000     180,000  

                                                 $1,080,000 $1,158,000

INCOME STATEMENT

For the Year Ended December 31, 2015

Sales revenue                                $ 6,300,000

Cost of sales                                     5,328,000

Gross profit                                          972,000

Selling and administrative expenses 648,000

Income from operations                     324,000

Less: Loss on sale of investments      36,000

Income before taxes                          288,000

Income tax expense                             72,000

Net income                                       $216,000

Additional data:

1. Cash dividends for the year 2015 $144,000

2. During the year, no plant assets are sold. All new plant assets are purchased by cash.

3. All depreciation expense is included in the selling expense category.

answer; i believe the correct answer is radioactive decay);