The comparative balance sheet and income statement of H and L Co Ltd, have just been prepared and presented to the owners by the companys Accountant. The owners are concerned about the movement in the companys cash and cash equivalent given that the balance sheet does not show or explain the reason or reasons why there was an increase or decrease in this area. The company uses the indirect method to prepare the statement of cash flows and it is expected that this should be able to provide the needed clarity required by the owners.

H and L Co Ltd
Comparative Balance Sheet
December 31, 2015 and 2014
	2015	2014
Assets
Cash and cash equivalent	320,000	275,000
Accounts Receivable	180,000	240,000
Prepaid expenses	240,000	220,000
Equipment, net	350,000	210,000
Total Assets	1,090,000	945,000
Liabilities
Accounts payable	305,000	285,000
Accrued liabilities	285,000	305,000
Bond payable	195,000	95,000
Stockholders' Equity:
Common Stock	95,000	55,000
Retained earnings	350,000	255,000
Treasury stock	(140,000)	(50,000)
Total liabilities and stockholders' equity	1,090,000	945,000

H AND L Co Ltd
Income Statement
Year Ended December 31,2015
Revenues and gains:
Sales revenue	850,000
Gain on sale of equipment
Interest revenue	2,500
Total revenues and gains		852,500
Expenses
Cost of goods sold	465,500
Salary expense	65,500
Depreciation expense	24,000
Rent expense	49,500
Loss on sale of equipment	2,500
Total expenses		607,000
Income before income taxes		245,500
Income tax expense		38,000
Net Profit		207,500

Notes
Purchase of equipment		243,000
Cash receipt from sale of equipment		76,500
Issuance of bonds payable to borrow cash		100,000
Cash receipt from issuance of common stock		40,000
Dividend paid		112,500
Book value of equipment sold		79,000
Purchase of treasury stock		90,000

Prepare a complete statement of cash flows for December 2015 using the indirect method based on the information.