Sharp Company

Comparative Balance Sheet

December 31

2015 2014

Cash $ 54,000 $ 36,000

Accounts receivable, net 53,000 57,000

Inventory 161,000 123,000

Land 180,000 285,000

Building 300,000 300,000

Accumulated depreciation—building (75,000) (60,000)

Equipment 1,565,000 900,000

Accumulated depreciation—equipment (177,000) (141,000)

$2,061,000 $1,500,000

Accounts payable $ 202,000 $ 150,000

Bonds payable 450,000 -0-

Capital stock, $10 par 1,250,000 1,250,000

Retained earnings 159,000 100,000

$2,061,000 $1,500,000

Additional Data:

1. Net income for the year amounted to $109,000.

2. Cash dividends were paid amounting to 4% of par value.

3. Land was sold for $120,000.

4. Sharp sold equipment, which cost $225,000 and had accumulated depreciation of $90,000, for $115,000.

Instructions

Prepare a statement of cash flows using the indirect method. following items represents a potential use of cash? a) patent amortization b) sale of plant