Cash dividends of 60000 were paid in cashinvestments with a

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Reference no: EM13587955

The comparative balance sheet of Nance Company, for the current year and the preceding year ended December 31, appears below:

Current Year Preceding Year

Cash $70,000 $52,500

Accounts Receivable 83,000 90,100

Inventories 204,400 193,900

Investments -0- 50,000

Equipment 600,000 510,000

Accumulated Depreciation-Equipment (175,000) (190,000)

$782,400 $706,500

Accounts Payable $97,250 77,750

Long-Term Bonds Payable -0- 100,000

Common Stock, $20 par value 450,000 400,000

Paid-in Capital in Excess of Par Value 70,000 50,000

Retained Earnings 165,150 78,750

$782,400 $706,500

Additional data for the current year are as follows:

1. Net income is equal to $146,400.

2. Depreciation reported on the income statement is $35,000.

3. Equipment was purchased for $140,000 cash.

4. Long-Term bonds payable were paid in cash at their face amount.

5. 2,500 shares of common stock were issued at $28 per share for cash.

6. Cash dividends of $60,000 were paid in cash.

7. Investments with a cost of $50,000 were sold for $75,000 cash.

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

Reference no: EM13587955

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