Year-End Balance Sheet and Statement of Cash Flows—

Indirect Method The balance sheet of Poodle Company at the end of 2009 is presented here, along with certain other information for 2010:

December 31, 2009 Cash $ 155,000 Accounts receivable 140,000 Total current assets $ 295,000 Land $ 100,000 Plant and equipment 700,000 Accumulated depreciation (175,000)
Investments 125,000 Total long-term assets $ 750,000 Total assets $1,045,000 Current liabilities $ 325,000 Bonds payable $ 100,000 Common stock $ 500,000 Retained earnings 120,000 Total stockholders’ equity $ 620,000 Total liabilities and stockholders’ equity $1,045,000.

Other information is as follows:

a. Net income for 2010 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 fl ows for 2010 using the indirect method in the Operating Activities section. Include a supplemental schedule for noncash activities.
2. Prepare a balance sheet at December 31, 2010.
3. What primary uses did Poodle make of the cash it generated from operating activities?AppendixLO1