Managerial Accounting: E14-32 Refer to the comparative balance sheet for Lawlor Lawn Service

Managerial Accounting
E14-32 Preparing the statement of cash flows—indirect method
This exercise continues the Lawlor Lawn Service, Inc., situation from Exercise 13-36 of Chapter 13.
Refer to the comparative balance sheet for Lawlor Lawn Service.
LAWLOR LAWN SERVICE, INC.
Comparative Balance Sheet
May 31, 2013 and 2012
Assets 2013 2012
Cash 17,420 2,420
Accounts receivable 2,550 50
Lawn supplies 150 40
Equipment 1,440 1,440
Accumulated depreciation (360) (30)
Building 120,000 -
Accumulated depreciation (2,500) —
Total Assets $138,700 $3,920
Liabilities
Accounts payable 440 1,440
Interest payable 555 -
Current portion of mortgage payable 12,000 -
Mortgage payable 99,000 -
Total liabilities 111,995 1,440
Stockholders’ Equity
Common stock 2,700 1,700
Retained earnings 24,005 780
Total liabilities and stockholders’ equity $138,700 $3,920

Requirement
1. Prepare the statement of cash flows using the indirect method. Assume no dividends were declared or paid during the year.
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