1- On the basis of the following data for Breach Co. for the current and preceding years ended December 31, prepare a statement of cash flows using the indirect method. Assume that equipment costing $25,000 was purchased for cash and no long-term assets were sold during the period.

Stock was issued for cash-3,200 shares at par.

Net income for the current year was $76,000.

Cash dividends declared and paid were $13,000.

Current Year Prior Year

Assets

Cash $170,000 $74,000

Accounts Receivable (net) 78,000 85,000

Inventories 106,500 90,000

Equipment 395,000 370,000

Accumulated Depreciation (195,000) (158,000)

Total assets $554,500 $461,000

Liabilities and stockholders' equity

Accounts Payable (merchandise creditors) $51,000 $50,000

Taxes Payable 2,500 5,000

Common Stock, $10 par 262,000 230,000

Retained Earnings 239,000 176,000

Total Liabilities and Stockholders' Equity $554,500 $461,000

Use the minus sign to indicate cash out flows, cash payments, decreases in cash, or any negative adjustments.

Breach Co.

Statement of Cash Flows

For Year Ended December 31

Cash flows from operating activities:

_________________ $______________

Adjustments to reconcile net income to net cash flow from operating activities:

________________ $_______________

Changes in current operating assets and liabilities:

________________ $______________

_________________ $______________

_________________ $______________

_________________ $______________

Net cash flow from operating activities $______________

Cash flows from investing activities:

________________ $______________

Net cash flow used for investing activities $______________

Cash flows from financing activities:

_______________ $______________

_______________ $______________

Net cash flow provided by financing activities $_______________

_______________ $_______________

Cash at the beginning of the year $______________

Cash at the end of the year $______________