On the basis of the following data for Garrett Co. for Years 1 and 2 ended December 31, 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 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 $56,000 and cash dividends declared of $18,000. (Q.11)

	Year 2	Year 1
Assets
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)
Total assets	$534,500	$465,000
Liabilities and Stockholders' Equity
Accounts payable (merchandise creditors)	$ 53,500	$55,000
Cash dividends payable	5,000	4,000
Common stock, $10 par	200,000	170,000
Paidin capital in excess of parcommon stock	62,000	60,000
Retained earnings	214,000	176,000
Total liabilities and stockholders' equity	$534,500	$465,000

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

Garrett Co.
Statement of Cash Flows
For the Year Ended December 31, Year 2
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		$