Acc421 Intermediate Accounting: W5-3 Talbot Corporation (Statement of Cash Flows - Indirect Method)

Acc421 Intermediate Accounting

W5-3 Statement of Cash Flows - Indirect Method
The comparative balance sheets for Talbot Corporation show the following information:
December 31
2008 2007
Cash $1,800 $1,050
Accounts receivable 1,750 1,400
Inventory 1,600 1,800
Plant Assets 1,900 1,700
Accumulated depreciation (1,200) (1,150)
Long-term investments (Held-to-maturity) 1,300 1,320
Totals $7,150 $6,120

Accounts payable $1,200 $800
Accrued liabilities 200 270
Bonds payable 1,400 1,550
Common stock 1,900 1,700
Retained earnings 2,450 1,800
Totals $7,150 $6,120


Talbot Corporation
Income Statement
For the Year Ended December 31, 2008

Sales $6,900
Cost of goods sold 4,600
Gross margin 2,300
Selling and administrative expense 930
Income from operations 1,370
Other revenues and gains
Gain on sale of investments 80
Income before tax 1,450
Income tax expense 540
Net income 910
Cash dividends 260
Income retained in business $650


Additional information:
During the year, $70 of common stock was issued in exchange for plant assets. No plant
assets were sold in 2008.

Instructions:
Prepare a statement of cash flows using the indirect method.
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