Condensed financial data of Arma Inc. follow.

Additional information:
1. New plant assets costing $85,000 were purchased for cash during the year.
2. Old plant assets having an original cost of $57,500 were sold for $1,500 cash.
3. Bonds matured and were paid off at face value for cash.
4. A cash dividend of $40,350 was declared and paid during the year. Instructions
Prepare a statement of cash flows using the indirect method.

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ARMA INC. Comparative Balance Sheets December 31 Assets 2010 2009 $ 90,800 $ 48,400 33,000 102,850 Cash Accounts receivable 92,800 Inventories Prepaid expenses Investments 112,500 28,400 138,000 26,000 114,000 242,500 (52,000) 270,000 (50,000) Plant assets Accumulated depreciation $682,500 Total $514,750 Liabilities and Stockholders' Equity $ 67,300 17,000 $112,000 Accounts payable Accrued expenses payable Bonds payable Common stock Retained earnings 16,500 110,000 150,000 175,000 105,450 220,000 224,000 $682,500 Total $514,750 ARMA INC. Income Statement For the Year Ended December 31, 2010 Sales $392,780 Less: Cost of goods sold Operating expenses, excluding depreciation Depreciation expense $135,460 12,410 46,500 Income taxes 27,280 4,730 Interest expense Loss on sale of plant assets 7,500 233,880 $158,900 Net income