Complete problem P10.2

The attached workbook should assist you in complete the problem:

P10.2 Statement of Cash Flows, Indirect Method Net income Adjustments to reconcile Net Income: Operating Activities Credit card receivables, increased Accounts receivable, increased Inventories, increased Prepaid expenses, decreased Accounts payable, decreased Accrued payroll payable, increased Taxes payable, decreased Depreciation expense Gain on disposal, furnishings. Loss on disposal of equipment Net adjustments to reconcile Net Income Net cash flow, operating activities $0 SO Investing Activities Sold furnishings Sold equipment Purchased new furnishings Purchased new equipment Net Cash Flow from Investing Activities $0 Financing Activities Reduction to long-term debt Prepaid expenses, decreased Accounts payable, decreased Accrued payroll payable, increased Taxes payable, decreased Depreciation expense Gain on disposal, furnishings Loss on disposal of equipment Net adjustments to reconcile Net Income Net cash flow, operating activities $0 SO Investing Activities Sold furnishings Sold equipment Purchased new furnishings Purchased new equipment Net Cash Flow from Investing Activities $0 Financing Activities Reduction to long-term debt Cash dividends declared and paid Net cash flow, financing activities Net cash flow, increase Cash balance, December 31, 0007 Cash balance, December 31, 0008 $0 $0 $12,020 $12.020