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
Declared December 15, 2010 December 15, 2009
Paid February 28, 2011 February 28, 2010
Amount $80,000 $100,000
Prepare a statement of cash flows for Sullivan Corp. for the year ended December 31, 2010, using the indirect method.(AICPAadapted)
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