E17-8 Here are comparative balance sheets for Taguchi Company. Prepa flows (SO3 TAGUCHI COMPANY Comparative Balance Sheets December 31 Assets 2010 Cash Accounts receivable Inventories Land Equipment Accumulated depreciation Total $ 73.000 85,000 170,000 75,000 260,000 (66,000) $597,000 2009 $ 22,000 76,000 189,000 100,000 200,000 (32,000) $555,000 Liabilities and Stockholders' Equity Accounts payable Bonds payable Common stock ($1 par) Retained earnings Total $ 39,000 150,000 216,000 192,000 $597,000 $ 47,000 200,000 174,000 134,000 $555,000 Additional information: 1. Net income for 2010 was $103,000. 2. Cash dividends of $45,000 were declared and paid. 3. Bonds payable amounting to $50,000 were redeemed for cash $50,000. 4. Common stock was issued for $42,000 cash. 5. No equipment was sold during 2010, but land was sold at cost. Problems: Set A 77 P17-9A Condensed financial data of Arma Inc. follow. Prepare a statement of cash flows-indirect method. (SO3) ARMA INC. Comparative Balance Sheets December 31 2009 Assets Cash Accounts receivable Inventories Prepaid expenses Investments Plant assets Accumulated depreciation Total 2010 $ 90,800 92.800 112,500 28,400 138,000 270,000 (50,000) $682,500 $ 48,400 33.000 102.850 26,000 114,000 242.500 (52,000) $514,750 Liabilities and Stockholders' Equity Accounts payable Accrued expenses payable Bonds payable Common stock Retained earnings Total $112.000 16,500 110,000 220,000 224,000 $682,500 $ 67,300 17,000 150,000 175.000 105.450 $514.750 ARMA INC. Income Statement For the Year Ended December 31, 2010 $392,780 $135,460 Sales Less: Cost of goods sold Operating expenses, excluding depreciation Depreciation expense Income taxes Interest expense Loss on sale of plant assets Net income 12.410 46,500 27.280 4,730 7.500 233.880 $158.900 Additional information: 1. New plant assets costing $85,000 were purchased for cash during the year. 2. Old plant assets having an original cost of $57,500 were sold for $1,500 cash. 3. Bonds matured and were paid off at face value for cash. 4. A cash dividend of $40,350 was declared and paid during the year. Instructions Prepare a statement of cash flows using the indirect method. Cash from operations $185,250