(Solution) - Audio House Inc is developing its annual financial statements -(2025 Original AI-Free Solution)

Paper Details

Audio House, Inc., is developing its annual financial statements at December 31, 2013. The statements are complete except for the statement of cash flows. The completed comparative balance sheets and income statement are summarized as follows:

Additional Data:
a. Bought equipment for cash, $60,000.
b. Borrowed an additional $11,000 and signed an additional long-term note payable.
c. Issued new shares of stock for $5,000 cash.
d. Dividends of $5,000 were declared and paid in cash.
e. Other expenses included depreciation, $15,000; wages, $20,000; and taxes, $25,000.
f. Accounts payable includes only inventory purchases made on credit
Required:
1. Prepare the statement of cash flows for the year ended December 31, 2013, using the indirect method.
2. Based on the cash flow statement, write a short paragraph explaining the major sources and uses of cash during2013.