The comparative balance sheet of Portable Luggage Company at December 31, 2008 and 2007, is as follows:

An examination of the income statement and the accounting records revealed the following additional information applicable to 2008:

a. Net income, $204,800.

b. Depreciation expense reported on the income statement: buildings, $20,500; machinery and equipment, $9,000.

c. Patent amortization reported on the income statement, $5,500.

d. A building was constructed for $230,000.

e. A mortgage note for $90,000 was issued for cash.

f. 4,000 shares of common stock were issued at $38.50 in exchange for the bonds payable.

g. Cash dividends declared, $52,000.

Instructions

Prepare a statement of cash flows, using the indirect method of presenting cash flows from operating activities.

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Dec. 31, 2007 Dec. 31, 2008 Assets $ 175,900 $ 143,200 235,000 405,800 10,000 120,000 450,000 (164,500) 310,000 (76,000) 48,000 $1,481,500 Cash Accounts receivable (net) 264,100 352,300 12,500 120,000 680,000 (185,000) 310,000 (85,000) 42,500 $1,687,300 Inventories Prepaid expenses Land ... Buildings Accumulated depreciation-buildings Machinery and equipment ..... Accumulated depreciation-machinery & equipment . Patents Liabilities and Stockholders' Equity $ 332,300 13,000 $ 367,900 10,000 34,600 Accounts payable (merchandise creditors) Dividends payable . Salaries payable ... Mortgage note payable, due 2015 Bonds payable . Common stock, $1 par Paid-in capital in excess of par-common stock Retained earnings 30,200 90,000 154,000 20,000 50,000 24,000 200,000 997,800 845,000 $1,481,500 $1,687,300