Reference no: EM13356421

Statement of cash flows (indirect method).

The net changes in the balance sheet accounts of Lenon, Inc. for the year 2008 are shown below:

Account	Debit	Credit
Cash	$125,600
Accounts receivable		$64,000
Allowance for doubtful accounts		14,000
Inventory	217,000
Prepaid expenses	20,000
Long-term investments		144,000
Land	300,000
Buildings	600,000
Machinery	100,000
Office equipment		28,000
Accumulated depreciation:
Buildings		24,000
Machinery		20,000
Office equipment	12,000
Accounts payable	183,200
Accrued liabilities		72,000
Dividends payable		128,000
Premium on bonds		32,000
Bonds payable		800,000
Preferred stock ($50 par)	60,000
Common stock ($10 par)		156,000
Additional paid-in capital-common		223,200
Retained earnings	87,200
	$1,705,200	$1,705,200

Additional information:

1.      Income Statement Data for Year Ended December 31, 2008
Income before extraordinary item	$272,000
Extraordinary loss: Condemnation of land	132,000
Net income	$140,000

2. Cash dividends Of $128,000 were declared December 15, 2008, payable January 15, 2009. A 5% stock dividend was issued March 31, 2008, when the market value was $22.00 per share.
3. The long-term investments were sold for $140,000.
4. A building and land which cost $480,000 and had a book value of $300,000 were sold for $400,000. The cost of the land, included in the cost and book value above, was $20,000.
5. The following entry was made to record an exchange of an old machine for a new one:

Machinery ............160,000
Cash .................. 40,000
Machinery ............ 60,000
Cash ............... 140,000

6. A fully depreciated copier machine which cost $28,000 was written off.
7. Preferred stock of $60,000 par value was redeemed for $80,000.
8. The company sold 12,000 shares of its common stock ($10 par) on June 15, 2008 for $25 a share. There were 87,600 shares outstanding on December 31, 2008.9. 
Bonds were sold at 104 on December 31, 2008.
10. Land that was condemned had a book value of $240,000.

Instructions

Prepare a statement of cash flows (indirect method). Ignore tax effects.