Maddie Inc. data for Years, 1 and 2 ended December 31. Assume that equipment costing $125,000 was purchased for cash and equipment costing $85,000 with accumulated depreciation of $65,000 was sold for $15,000; that the stock was issued for cash; and that the only entries in the retained earnings account were for net income of ? and cash dividends declared of $18,000.

Instructions: 1. Prepare the operating section of the Statement of Cash Flow using the indirect method in good form. 2. What is the cash flow used or provided from Investing? 3. What is the cash flow used or provided from Financing? Year 2

Year 1

Cash $ 90,000

$ 78,000

Accounts receivable (net) 78,000

85,000

Inventories 106,500

90,000

Equipment 410,000

370,000

Accumulated depreciation (150,000)

(158,000)

$534,500

$465,000

Accounts payable (merchandise creditors) $ 53,500

$ 55,000

Cash dividends payable 5,000

4,000

Common stock, $10 par 200,000

170,000

Paid-in capital in excess of parcommon stock 62,000

60,000

Retained earnings 214,000

176,000

$534,500

$465,000