Year-End Balance Sheet and Statement of Cash Flows—Indirect Method The balance sheet of Poodle Company at the end of 2007 is presented here, along with certain other information for 2008:

Other information is as follows:

a. Net income for 2008 was $50,000.

b. Included in operating expenses was $25,000 in depreciation.

c. Cash dividends of $40,000 were declared and paid.

d. An additional $50,000 of common stock was issued for cash.

e. Bonds payable of $100,000 were purchased for cash and retired at no gain or loss.

f. Cash purchases of plant and equipment during the year were $60,000.
g. An additional $200,000 of land was acquired in exchange for a long-term note payable.
h. During the year, sales exceeded cash collections on account by $15,000. All sales are on account.
i. The amount of current liabilities decreased by $20,000 during the year.
Required 1. Prepare a statement of cash flows for 2008 using the indirect method in the Operating Activities section. Include a supplemental schedule for noncash activities.
2. Prepare a balance sheet at December 31, 2008.
3. What primary uses did Poodle make of the cash it generated from operating activities?

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Cash Accounts receivable Total current assets Land Plant and equipment Accumulated depreciation Investments Total long-term assets Total assets Current liabilities Bonds payable December 31, 2007 $ 155,000 140,000 $ 295,000 $ 100,000 700,000 (175,000) 125,000 $ 750,000 $1,045,000 $ 325,000 $ 100,000 Common stock Retained earnings Total stockholders' equity Total liabilities and stockholders' equity $ 500,000 120,000 $ 620,000 $1,045,000