5 Thur 31 Reve Sales Exp THE SEN CORPORATION Statement of Income and Retained Earnings For the Year Ended December 31, 2011 Cain on sale of investments Cost of goods sold General and administrative Depreciation expe Loss on sale of machinery Net Income Retained earnings, January 1 Lese Stock Dividend Capitalization (See below Less: Cash Dividends (all paid during the year) Retained earnings, December 31 $540,000 330 $543,750 $380,000 111,825 8.625 800 1501250 542.300 42.625 (25.000) (21.125 $39.00 In addition, the president of the corporation has provided you with the following information 1. A 20% stock dividend was declared during the year resulting in the capitalization of $25,000 of retained carnings 2. Machinery that cost $3.750 (with current accumulated depreciation of $750) was sold for $2.200 3. Investments that cost $20,000 were sold during the year for $23,750. Assume the cost and current book value are the same for this investment Prepare the Statement of Cash Flows for the year ending December 31, 2011 using the direct method for operations. Be sure to include the supplemental disclosure reconciling Net Income to cash flow from operations. Check Figures: Cash Inflow from Operations $41,425 Cash Outflow from Investing $4,050 Cash Outflow from Financing $26,125