Problem - The financial statements of Meenan Company appear below:
MEENAN COMPANY Comparative Balance Sheet December 31
2010 2009
Assets
Cash $ 38,000 $ 23,000
Accounts receivable 26,000 34,000
Merchandise inventory 30,000 15,000
Property, plant, and equipment 50,000 78,000
Accumulated depreciation (20,000) (24,000)
Total $124,000 $126,000
Liabilities and Stockholders' Equity
Accounts payable $ 17,000 $ 23,000
Income taxes payable 13,000 8,000
Bonds payable 7,000 33,000
Common stock 41,000 24,000
Retained earnings 46,000 38,000
Total $124,000 $126,000
MEENAN COMPANY Income Statement For the Year Ended December 31, 2010
Sales $400,000
Cost of goods sold 280,000
Gross profit 120,000
Operating expenses 46,000
Income from operations 74,000
Interest expense 4,000
Income before income taxes 70,000
Income tax expense 21,000
Net income $ 49,000
The following additional data were provided:
1. During the year, equipment was sold for $15,000 cash. This equipment cost $28,000 originally and had a book value of $15,000 at the time of sale.
2. Depreciation expense of $9,000 is in the operating expenses.
Instructions - Prepare a statement of cash flows for Meenan Company using the indirect method.