The comparative balance sheets for Gallup Company appear below:
GALLUP COMPANY
Comparative Balance Sheet
Dec. 31, 2010 Dec. 31, 2009
Assets
Cash $28,000 $13,000
Accounts receivable 18,000 14,000
Prepaid expenses 7,000 9,000
Inventory 25,000 15,000
Long-term investments -0- 18,000
Equipment 60,000 30,000
Accumulated depreciation-equipment (18,000) (14,000)
Total assets $120,000 $85,000
Liabilities and Stockholders' Equity
Accounts payable $ 25,000 $ 7,000
Bonds payable 37,000 45,000
Common stock 40,000 23,000
Retained earnings 18,000 10,000
Total liabilities and stockholders' equity $120,000 $85,000
Additional information:
1. Net income for the year ending December 31, 2010, was $25,000.
2. Cash dividends of $17,000 were declared and paid during the year.
3. Long-term investments that had a book value of $18,000 were sold for $16,000.
4. Sales for 2010 are $120,000.
Instructions:
1. Prepare a statement of cash flows for the year ended December 31, 2010, using the indirect method.