Acc421 Intermediate Accounting: W5-4 Talbot Corporation (Statement of Cash Flows - Direct Method)

Acc421 Intermediate Accounting W5-4 Statement of Cash Flows - Direct Method Data for the Talbot Corporation are presented in W5-3. 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 direct method. (Do not prepare a reconciliation schedule).
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