P 10-3 BBB Company's balance sheet and income statement follow: OMPANY Balance Sheet December 31, 2011 and 2010 December 31, 2011 2010 Assets $ 4,500 2,500 6,800 7,500 21,300 $ 4,000 Cash Marketable securities Accounts receivable 2,000 7,200 8,000 21,200 12,000 20,500 (3,000) 70,000 (12,000) $108,700 Inventories Total current assets Land Equipment Accumulated depreciation-equipment Building Accumulated depreciation-building Total assets 11,000 24,000 (3,800) 70,000 (14,000) $108,500 Liabilities and Stodkholders' Equity Accounts payable Wages payable Taxes payable Total current liabilities Bonds payable Common stock, $10 par Additional paid-in capital Retained earnings Total liabilities and stockholders' equity $ 7,800 1,050 $ 7,000 1,000 1,500 9,500 30,000 30,000 19,200 20,000 $108,700 500 9,350 30,000 32,000 21,000 16,150 $108,500 OMPANY Income Statement For Year Ended December 31, 2011 Sales Operating expenses: Depreciation expense Other operating expenses Operating income Gain on sale of land Income before tax expense xpense Net income $38,000 $ 2,800 35,000 37,800 200 800 1,000 500 500 (continued) (P 10-3 CONTINUED) Supplemental information: Dividends declared and paid Land sold for cash Equipment purchased for cash Common stock sold for cash $ 4,3 50 1,800 3,500 3,800 Required a. Prepare a statement of cash flows for the year ended December 31, 2011. (Present the cash flows from operations using the indirect method.) b. Comment on the statement of cash flows.