Use the following financial statements and additional information to (1)prepare a complete statement of cash flows for the year ended December 31,2013.The cash provided or used by operating activities should be reported using the direct method,and (2)compute the company's cash flow on total assets ratio for 2013.
Additional Information
a.A $20,000 note payable is retired at its carrying value in exchange for cash.
b.The only changes affecting retained earnings are net income and cash dividends paid.
c.New equipment is acquired for $120,000 cash.
d.Received cash for the sale of equipment that had cost $85,000,yielding a gain of $4,700.
e.Prepaid expenses relate to Other Expenses on the income statement.
f.All purchases and sales of merchandise inventory are on credit.
Definitions:
Rational-emotive Therapy
A form of therapy that emphasizes changing irrational beliefs to overcome emotional distress and behavioral issues.
Ellis
Refers to Albert Ellis, an American psychologist who developed Rational Emotive Behavior Therapy (REBT), a significant precursor to cognitive-behavioral therapies.
Transference
The process where emotions originally associated with one person are unconsciously shifted to another person in current relationships.
Freud
Sigmund Freud, an Austrian neurologist and the founder of psychoanalysis, a clinical method for treating psychopathology.
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