Given an income statement and a balance sheet, prepare a cash flow statement using the indirect method. Dayton Tent & Awning Sales, Inc. Comparative Balance Sheets June 30, 2011 and 2010 2011 2010 Assets . Cash $441,800 $332,600 Accounts receivable, net 750,750 432,900 Merchandise inventory 819,000 850,200 Prepaid insurance 3,900 5,850 Land 312,000 351,000 Buildings 2,184,000 1,209,000 Machinery and tools 858,000 468,000 Accumulated depreciation - machinery and tools (809,250) (510,900) Total assets $4,560,200 $3,138,650 Liabilities and stockholders' equity Accounts payable $226,750 $275,500 Accrued liabilities payable 185,800 111,700 Bank loans (due in 2009) 56,550 66,300 Mortgage bonds payable 382,200 185,250 Common stock - $100 par 1,755,000 585,000 Paid-in capital in excess of par 58,500 Retained earnings 1,895,400 1,914,900 Total liabilities and stockholders' equity $4,560,200 $3,138,650 Net income for year ended 2011 June 30, was $ 56,250. Additional land was acquired for cash, $ 15,750. No equipment or building retirements occurred during the year. Equipment was purchased for cash, $ 47,250. The five-year note for $ 52,500 was issued to pay for a building erected on land leased by the company Stock was issued at par for cash, $ 52,500. Dividends declared and paid were $ 51,000. The company paid interest of $10,000 and income taxes of $ 40,000. Dayton Tent & Awning Sales, Inc. Statement of Cash Flows for the Year Ended June 30, 2011 Cash flows from operating activities: Net income Adjustments to reconcile net income to net cash provided by operating activities: Increase in accounts receivable Increase in merchandise inventory Decrease in prepaid insurance Decrease in accounts payable Increase in accrued liabilities payable Gain on sale of land Depreciation expense Net cash provided by operating activities Cash flows from investing activities: Proceeds from sale of land Purchase of building (cash portion) Purchase of machinery and tools Net cash used by investing activities Cash flows from financing activities: Proceeds from issuing common stock Dividends paid Bank loan reduction Net cash provided by financing activities Net increase (decrease) in cash Schedule of noncash investing and financing activities: Mortgage bonds issued as partial payment for building Retirement of fully depreciated machinery Supplemental cash flow information: Interest paid Income taxes paid