Problem:
Statement of Cash Flows
Cedar Company
Comparative Balance Sheet
December 31
2008 2007
Cash 64,000 36,000
Accounts receivable, net 53,000 57,000
Inventory 171,000 123,000
Land 180,000 285,000
Building 300,000 300,000
Accumulated depreciation (75,000) (60,000)
Equipment 1,545,000 900,000
Accumulated depreciation:(177,000) (141,000)
Total $2,061,000 $1,500000
Account payable 172,000 150,000
Bonds payable 480,000 -0-
Capital stock, $10 par 1,125,000 1,125,000
Retained earnings 284,000 225,000
Total $2,061,000 $1,500,000
Additional data:
1) net income for the year amounted to $104,000.
2) cash dividends were paid amounting to 4% of par value.
3) land was sold for $120,000.
4) Cedar sold equipment, which cost $225,000 and had accumulated depreciation of $90,000, for $105,000.
Prepare a statement of cash flows using the indirect method.