The comparative balance sheet of Nelson Company, for 2008 and the preceding year ended December 31, 2007, appears below in condensed form:
Year Year
2008 2007
Cash $ 68,000 $ 42,500
Accounts receivable (net) 61,000 70,200
Inventories 121,000 105,000
Investments ..... 100,000
Equipment 515,000 425,000
Accumulated dep-equipment (153,000) (175,000)
Accounts payable $ 59,750 $ 47,250
Bonds payable, due 2010 ..... 75,000
Common stock, $20 par 375,000 325,000
Premium on common stock 50,000 25,000
Retained earnings 127,250 95,450
Additional data for the current year are as follows:
(a) Net income, $71,800.
(b) Depreciation reported on income statement, $38,000.
(c) Fully depreciated equipment costing $60,000 was scrapped, no salvage, and equipment was purchased for $150,000.
(d) Bonds payable for $75,000 were retired by payment at their face amount.
(e) 2,500 shares of common stock were issued at $30 for cash.
(f) Cash dividends declared and paid, $40,000.
(g) Investments of $100,000 were sold for $125,000.
Prepare a statement of cash flows using the indirect method.