Prepare a statement of cash flows (indirect method) for the company for the year ended December 31, 2011:
Net income for the year 2011 was $8,000. Accounts receivable decreased $1,000, while inventories increased $3,000, and accounts payable decreased $6,000. Depreciation expense included in net income was $7,000.
During the year, a piece of land held for future expansion was sold for its book value of $6,000 and a new service truck was purchased for $12,000.
The company borrowed $15,000 on a two-year note from the bank. Dividends of $5,000 were paid in cash. Preferred stock was issued to retire $5,000 of long-term notes payable.The beginning cash balance was $10,000 and the ending balance was $20,000.