Condensed financial data of Arma Ltd. 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 indirectmethod.

Transcribed Image Text:

ARMA LTD Comparative Statements of Financial Position December 31 Assets Plant assets Accumulated depreciation Investments Prepaid expenses Inventories Accounts receivable Cash 2011 270,000 (50.000) 138.000 28.400 112.500 92.800 90.800 2010 $242.500 (52.000) 1 14.000 26.000 02.850 33.000 48.400 $514.750 Total $682.500 Equity and Liabilities Share capitalordinary Retained carnings Bonds payable Accounts payable Accrued expenses payable 220.000 224.000 10.000 2.000 16.500 682.500 $175.000 105.450 150.000 67.300 17.000 $514.750 Total ARMA LTD. Income Statement For the Year Ended December 31, 2011 392.780 Sales Less: Cost of goods sold Operating expenses. excluding S135.460 depreciation Depreciation expense Income taxes Interest expense Loss on sale of plant assets 2.410 46.500 27.280 4.730 7.500 233.880 $158,900 Net income