Statement of Cash Flows
Response to the following problem:
The following is a list of the items to be included in the preparation of the 2010 statement of cash flows for the Warrick Company:
1. Net income, $59,200
2. Payment for purchase of building, $98,000
3. Increase in accounts receivable, $7,400
4. Proceeds from issuance of common stock, $37,100
5. Increase in accounts payable, $4,500
6. Proceeds from sale of land, $7,000
7. Depreciation expense, $12,600
8. Payment of dividends, $36,000
9. Gain on sale of land, $5,300
10. Decrease in inventory, $3,700
11. Payment for purchase of long-term investments, $9,600
12. Amortization of discount on bonds payable, $1,900
13. Proceeds from issuance of note, $18,000
14. Increase in deferred taxes payable, $5,000
15. Equipment acquired by capital lease, $19,500
16. Decrease in salaries payable, $2,300
17. Beginning cash balance, $20,300
Required
1. Prepare the statement of cash flows.
2. Assume the company's preferred stock has been selling for $120 per share during 2010. How many shares would the company have had to issue to avoid having a decrease in cash during the year? Where would this issuance have been reported in the statement of cash flows?