Davis Corp s comparative balance sheet and income statement for the last year appear below:
Balance Sheet
For the Year Ended
December 31
2009 2008
Assets
Cash 57,000 23,000
Accounts receivable 90,000 69,000
Inventory 30,000 49,000
Prepaid expenses 9,000 15,000
Long-term investments 270,000 190,000
Plant and equipment 450,000 450,000
Less accumulated depreciation 273,000 231,000
Total assets 633,000 565,000
Liabilities
Accounts Payable 22,000 45,000
Accrued liabilities 31,000 24,000
Taxes payable 18,000 25,000
Bonds payable 60,000 100,000
Deferred taxes 39,000 24,000
Owners Equity
Common stock 140,000 110,000
Retained earnings 323,000 237,000
Total liabilities and owners equity 633,000 565,000
Income Statement
For the year 2009
Sales 850,000
Cost of goods sold 410,000
Gross margin 440,000
Selling & admin expenses 280,000
Net operating income 160,000
Income taxes 48,000
Net income 112,000
Davis declared and paid a cash dividend of $26,000 during 2009, and has another cash dividend planned for 2010 in the amount of $40,000. Davis has also planned to spend $150,000 in new capital equipment in 2010.
Required:
Prepare a statement of cash flows for Davis Corp. for the year ended December 31, 2009. Use the indirect method.