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E 1 2 - 7 ( Algo ) Preparing and Evaluating a Simple Statement of Cash Flows ( Indirect Method ) [ LO 1 2

E12-7(Algo) Preparing and Evaluating a Simple Statement of Cash Flows (Indirect Method)[LO 12-1, LO 12-2, LO 12-5]
Suppose the income statement for Goggle Company reports $127 of net income, after deducting depreciation of $27. The company bought equipment costing $100 and obtained a long-term bank loan for $102. The companys comparative balance sheet, at December 31, is presented here.
Required:
1. Calculate the change in each balance sheet account and indicate whether each account relates to operating, investing, and/or financing activities (+ for increase and for decrease).
2. Prepare a statement of cash flows using the indirect method.
6. Are the cash flows typical of a start-up, healthy, or troubled company?
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