December 31

2011 2010

Cash $ 64,000 $ 36,000

Accounts receivable, net 53,000 57,000

Inventory 171,000 123,000

Land 180,000 285,000

Building 300,000 300,000

Accumulated depreciation (75,000) (60,000)

Equipment 1,545,000 900,000

Accumulated depreciation (177,000) (141,000)

$2,061,000 $1,500,000

Accounts payable $172,000 $150,000

Bonds payable 480,000 -0-

Capital stock, $10 par 1,125,000 1,125,000

Retained earnings 284,000 225,000

$2,061,000 $1,500,000

Additional Data: 1. Net income for the year amounted to $104,000. 2. Cash dividends were paid amounting to 4% of par value. 3. Land was sold for $120,000. 4. Sharp sold equipment, which cost $225,000 and had accumulated depreciation of $90,000, for $105,000.

Instructions:

Prepare a statement of cash flows using the indirect method.

Specify:

(1) Cash flows from (a) operations, (b) investing and (c) financing activities.

(2) Net increase or decrease in cash from January to December, 2011.