On the basis of the following data for Branch Co. for the year ended December 31, 2011 and the preceding year, prepare a statement of cash flows using the indirect method of reporting cash flows from operating activities. Assume that equipment costing $125,000 was purchased for cash and the land was sold for $15,000. The stock was issued for cash and the only entries in the retained earnings account were net income of $56,000 and cash dividends declared and paid of $18,000. Year Year 2011 2010 Cash $65,000 $ 54,000 Accounts receivable (net) 78,000 85,000 Inventories 106,500 90,000 Land -- 20,000 Equipment 495,000 370,000 Accumulated depreciation (215,000) (158,000) $529,500 $461,000 Accounts payable (merchandise creditors) $ 53,500 $ 55,000 Common stock, $10 par 200,000 170,000 Paid-in capital in excess of par-- common stock 62,000 60,000 Retained earnings 214,000 176,000 $529,500 $461,000