1. On the basis of the following data for Breach Co. for the current and preceding years ended December 31, prepare a statement of cash flows using the indirect method. Assume that equipment costing $25,000 was purchased for cash and no long-term assets were sold during the period.

   Stock was issued for cash-3,200 shares at par. Net income for the current year was $76,000. Cash dividends declared and paid were $13,000.

   	Current Year	Prior Year
   Assets
   Cash	$ 170,000	$74,000
   Accounts Receivable (net)	78,000	85,000
   Inventories	106,500	90,000
   Equipment	395,000	370,000
   Accumulated Depreciation	(195,000)	(158,000)
   Total assets	$ 554,500	$461,000
   Liabilities and stockholders' equity
   Accounts Payable (merchandise creditors)	$51,000	$50,000
   Taxes Payable	2,500	5,000
   Common Stock, $10 par	262,000	230,000
   Retained Earnings	239,000	176,000
   Total Liabilities and Stockholders' Equity	$ 554,500	$461,000

   Use the minus sign to indicate cash out flows, cash payments, decreases in cash, or any negative adjustments.

   Breach Co.
   Statement of Cash Flows
   For Year Ended December 31
   Cash flows from operating activities:
   Adjustments to reconcile net income to net cash flow from operating activities:
   Changes in current operating assets and liabilities:
   Net cash flow from operating activities
   Cash flows from investing activities:
   Net cash flow used for investing activities
   Cash flows from financing activities:
   Net cash flow provided by financing activities
   Cash at the beginning of the year
   Cash at the end of the year