Prepare a statement of cash flows using the indirect Method.

a. Long-term investments that cost $20,000 were sold at a loss of $1,200; additional long term investments were made in the amount of $25,000

b. A new building site was purchased for $60,000.

c. Equipment that cost $150,000 with accumulated depreciation of $90,000 was sold at a gain of $5,600; new equipment was purchased for $155,000

d. A note payable in the amount of $56,000 was paid off.

e. $100,000 worth bond payable was retired at 102.

f. The Mortgage Payable account was reduced by $50,000 during the year

g. Cash Dividends declared and paid were $25,000

h. Sold 500 shares of $1 par common stock at $5 per share

$ 2,000,000 850,000 1,150,000 $ Final Company Income Statement For the year ended Dec 31, 2010 Net Sales Cost of Goods Sold Gross margin Operating Expenses (including depreciation Expense of $21,000 on Buildings and $16,000 on Equipment) Operating Income Other Income (expense) Interest Expense (18,200) Dividend Income 2.200 Loss on Sale of Investments (1,200) Gain on Disposal of Equipment 5,600 Income before Taxes Income Taxes Net Income 625,000 525,000 $ $ (11,600) 513,400 99,800 413,600 $ 2009 $ Final Company Comparative Balance Sheets December 31, 2009 and 2010 2010 Assets Cash $ 111,800 Accounts Receivable 100,000 Inventory 250,000 Prepaid Expense 18,000 Long Term Investments 39,000 Land 175,000 Buildings 389,000 Accumulated Depreciation - Buildings (166,000) Equipment 270,000 Accumulated Depreciation - Equipment (39,000) Total Assets $ 1,147,800 Liabilities & Stockholders Equity Accounts Payable $ 180,000 Notes Payable 70,000 Accrued Liabilities (payroll) 8,000 Income Taxes Payable 3,000 Bonds Payable 50,000 Mortgage Payable 125,000 Common Stock ($1 par) 32,500 Paid in Excess of Par Value 121,500 Retained Earnings 557,800 Total Liabilities & Stockholders Equity $ 1,147,800 12,300 114,000 318,500 14,700 34,000 115,000 389,000 (145,000) 265,000 (113,000) 1,004,500 $ $ 222,000 126,000 5,600 3,200 150,000 175,000 32,000 119,500 171,200 1,004,500 $ The following additional information was taken from the company's records: a. Long-term investments that cost $20,000 were sold at a loss of $1,200; additional long term investments were made in the amount of $25,000 b. A new building site was purchased for $60,000. c. Equipment that cost $150,000 with accumulated depreciation of $90,000 was sold at a gain of $5,600; new equipment was purchased for $155,000 d. A note payable in the amount of $56,000 was paid off. e. $100,000 worth bond payable was retired at 102. f. The Mortgage Payable account was reduced by $50,000 during the year g. Cash Dividends declared and paid were $25,000 h. Sold 500 shares of $1 par common stock at $5 per share $ 2,000,000 850,000 1,150,000 $ Final Company Income Statement For the year ended Dec 31, 2010 Net Sales Cost of Goods Sold Gross margin Operating Expenses (including depreciation Expense of $21,000 on Buildings and $16,000 on Equipment) Operating Income Other Income (expense) Interest Expense (18,200) Dividend Income 2.200 Loss on Sale of Investments (1,200) Gain on Disposal of Equipment 5,600 Income before Taxes Income Taxes Net Income 625,000 525,000 $ $ (11,600) 513,400 99,800 413,600 $ 2009 $ Final Company Comparative Balance Sheets December 31, 2009 and 2010 2010 Assets Cash $ 111,800 Accounts Receivable 100,000 Inventory 250,000 Prepaid Expense 18,000 Long Term Investments 39,000 Land 175,000 Buildings 389,000 Accumulated Depreciation - Buildings (166,000) Equipment 270,000 Accumulated Depreciation - Equipment (39,000) Total Assets $ 1,147,800 Liabilities & Stockholders Equity Accounts Payable $ 180,000 Notes Payable 70,000 Accrued Liabilities (payroll) 8,000 Income Taxes Payable 3,000 Bonds Payable 50,000 Mortgage Payable 125,000 Common Stock ($1 par) 32,500 Paid in Excess of Par Value 121,500 Retained Earnings 557,800 Total Liabilities & Stockholders Equity $ 1,147,800 12,300 114,000 318,500 14,700 34,000 115,000 389,000 (145,000) 265,000 (113,000) 1,004,500 $ $ 222,000 126,000 5,600 3,200 150,000 175,000 32,000 119,500 171,200 1,004,500 $ The following additional information was taken from the company's records: a. Long-term investments that cost $20,000 were sold at a loss of $1,200; additional long term investments were made in the amount of $25,000 b. A new building site was purchased for $60,000. c. Equipment that cost $150,000 with accumulated depreciation of $90,000 was sold at a gain of $5,600; new equipment was purchased for $155,000 d. A note payable in the amount of $56,000 was paid off. e. $100,000 worth bond payable was retired at 102. f. The Mortgage Payable account was reduced by $50,000 during the year g. Cash Dividends declared and paid were $25,000 h. Sold 500 shares of $1 par common stock at $5 per share