The following is Sullivan Corp.'s comparative balance sheet accounts at December 31, 2010 and 2009, with a

Question:

The following is Sullivan Corp.'s comparative balance sheet accounts at December 31, 2010 and 2009, with a column showing the increase (decrease) from 2009 to 2010.

Additional information:

1. On December 31, 2009, Sullivan acquired 25% of Myers Co.'s common stock for $275,000. On that date, the carrying value of Myers's assets and liabilities, which approximated their fair values, was $1,100,000. Myers reported income of $140,000 for the year ended December 31, 2010. No dividend was paid on Myers's common stock during the year.

2. During 2010, Sullivan loaned $300,000 to TLC Co., an unrelated company. TLC made the first semiannual principal repayment of $50,000, plus interest at 10%, on December 31, 2010.

3. On January 2, 2010, Sullivan sold equipment costing $60,000, with a carrying amount of $38,000, for $40,000 cash.

4. On December 31, 2010, Sullivan entered into a capital lease for an office building. The present value of the annual rental payments is $400,000, which equals the fair value of the building. Sullivan made the first rental payment of $60,000 when due on January 2, 2011.

5. Net income for 2010 was $370,000.

6. Sullivan declared and paid cash dividends for 2010 and 2009 as shown below.

2010 2009 December 15, 2010 December 15, 2009 Declared February 28, 2010 Paid February 28, 2011 Amount S80,000 $100,000

Prepare a statement of cash flows for Sullivan Corp. for the year ended December 31, 2010, using the indirect method.

(AICPAadapted)

The following is Sullivan Corp.'s comparative balance sheet acco

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