Indirect method of preparing a cash flow statement Task 1: Prepare a cash flow statement for XYZ Company, using the indirect method. Complete a cash flow/statement of changes in financial position for XYZ Company for 2012, given the information below:

XYZ Company Balance sheet December 31, 2012
	December 31
Assets	2012	2011
Cash	63,000	22,000
Accounts receivable	85,000	76,000
Inventories	180,000	189,000
Land	75,000	100,000
Equipment	260,000	200,000
Accumulated amortization	(66,000) (underline)	(42,000) (underline)
Total	597,000 (double underline)	545,000 (double underline)
Liabilities and equity
Accounts payable	34,000	47,000
Bonds payable	150,000	200,000
Common shares	214,000	164,000
Retained earnings	199,000 (underline)	134,000 (underline)
Total	597,000 (double underline)	545,000 (double underline)

Additional Information: Net income for 2012 was $125,000. Cash dividends of $60,000 were declared and paid. Bonds payable with a carrying value of $50,000 were redeemed for $50,000 cash. Common shares were issued for $50,000 cash. Land was sold at a gain of $5,000. Net sales for the year were $978,000. Instructions: Prepare a cash flow statement (statement of changes in financial position) for 2012, using the indirect method.