Acc291 Financial Accounting: P13-9A Condensed financial data of Arma inc (Indirect Method)

Acc291 Principles of Accounting

P13-9A
Condensed financial data of Arma Inc, follow:
ARMA INC.
Comparative Balance Sheets
December 31
Assets
2011 2010
Cash $90,800 $48,400
Accounts receivable 92,800 33,000
Inventories 112,500 102,850
Prepaid expenses 28,400 26,000
Investments 138,000 114,000
Plant assets 270,000 242,500
Accumulated depreciation (50,000) (52,000)
Total $682,500 $514,750

Liabilities and Stockholders' Equity
Accounts payable $112,000 $67,300
Accrued expenses payable 16,500 17,000
Bonds payable 110,000 150,000
Common stock 220,000 175,000
Retained earnings 224,000 105,450
Total $682,500 $514,750

ARMA INC.
Income Statement
For the Year Ended December 31, 2011
Sales $392,780
Less:
Cost of goods sold $135,460
Operating expenses, excluding depreciation 12,410
Depreciation expense 46,500
Income taxes 27,280
Interest expense 4,730
Loss on sale of plant assets 7,500
233,880
Net income $158,900

Additional information:
1. New plant assets costing $85,000 were purchased for cash during the year.
2. Old plant assets having an original cost of $57,500 were sold for $1,500 cash.
3. Bonds matured and were paid off at face value for cash.
4. A cash dividend of $40,350 was declared and paid during the year.

Instructions:
Complete the statement of cash flows using the indirect method. (List amounts from largest positive to smallest positive followed by most negative to least negative, e.g. 15, 14, 10, -17, -5, -1. If amount decreases cash flow, use either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)
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