Reference no: EM131774278

Problem - Biven Corporation's balance sheet and income statement appear below:

BALANCE SHEETS

2006 2005

ASSETS

Cash & equivalents $35,000 $30,000

Accounta receivable 54,000 49,000

Inventory 67,000 58,000

Plant & equipment 580,000 530,000

Accumulated depreciation (316,000) (313,000)

Total Assets $420,000 $354,000

LIABILITIES & EQUITIES

Accounts payable $51,000 $57,000

Wages payable 26,000 24,000

Taxes payable 11,000 10,000

Deferred taxes payable 25,000 24,000

Bonds payable (long term) 77,000 90,000

Total liabilities 190,000 205,000

Common stock 33,000 30,000

Retained earnings 197,000 119,000

Total equities 230,000 149,000

Total liabilities & equities $420,000 $354,000

INCOME STATEMENTS

2006 2005

Sales $620,000 $520,000

Cost of goods sold 381,000 300,000

Gross margin 239,000 220,000

Selling & Admin expense 103,000 99,000

Net operating income 136,000 121,000

Gain on sale of plant & equipment 20,000 -

Income before tax 156,000 121,000

Income tax 47,000 36,000

Net income $109,000 $85,000

Cash dividends were $31,000. The company sold equipment for $20,000. The equipment had originally cost $14,000 and was fully depreciated.

Required: Prepare a statement of cash flows for 2006 using the indirect and direct methods.