DO IT! 12-2b

Prepare statement of cash flowsindirect method.

(LO 2), AP

Alex Company reported the following information for 2017.

ALEX COMPANY Comparative Balance Sheets December 31
Assets	2017	2016	Change Increase/Decrease
Cash	$ 59,000	$ 36,000	$ 23,000 Increase
Accounts receivable	62,000	22,000	40,000 Increase
Inventory	44,000	-0-	44,000 Increase
Prepaid expenses	6,000	4,000	2,000 Increase
Land	55,000	70,000	15,000 Decrease
Buildings	200,000	200,000	-0-
Accumulated depreciationbuildings	(21,000)	(14,000)	7,000 Increase
Equipment	183,000	68,000	115,000 Increase
Accumulated depreciationequipment	(28,000)	(10,000)	18,000 Increase
Totals	$560,000	$376,000
Liabilities and Stockholders' Equity
Accounts payable	$ 43,000	$ 40,000	$3,000 Increase
Accrued expenses payable	-0-	10,000	10,000 Decrease
Bonds payable	100,000	150,000	50,000 Decrease
Common stock ($1 par)	230,000	60,000	170,000 Increase
Retained earnings	187,000	116,000	71,000 Increase
Totals	$560,000	$376,000

ALEX COMPANY Income Statement For the Year Ended December 31, 2017
Sales revenue		$941,000
Cost of goods sold	$475,000
Operating expenses	231,000
Interest expense	12,000
Loss on disposal of equipment	2,000	720,000
Income before income taxes		221,000
Income tax expense		65,000
Net income		$156,000

Additional information:

1.Operating expenses include depreciation expense of $40,000.

2.Land was sold at its book value for cash.

3.Cash dividends of $85,000 were declared and paid in 2017.

4.Equipment with a cost of $166,000 was purchased for cash. Equipment with a cost of $51,000 and a book value of $36,000 was sold for $34,000 cash.

5.Bonds of $50,000 were redeemed at their face value for cash.

6.Common stock ($1 par) of $170,000 was issued for cash.

Use this information to prepare a statement of cash flows using the indirect method. Answer the following questions:

A) Cash Flow from Operating Activities

B) Cash Flow from Investing Activities

C) Cash Flow from Financing Activities