Problem - Presented below are data taken from the records of Natural Homes Company.
12/31/2007 12/31/2006
Cash $15,000 $5,000
Current assets other than cash 105,000 129,000
Long-term investments 60,000 50,000
Plant assets 330,000 351,000
$510,000 $535,000
Accumulated depreciation 88,000 102,000
Current liabilities 65000 $73,000
Bonds payable 50000 100,000
Capital stock 173000 153,000
Retained earnings 134000 107,000
$510,000 $535,000
Additional information:
1. Held-to-maturity securities carried at a cost of $25,000 on December 31, 2006, were sold in 2007 for $30,000. The gain (not extraordinary) was incorrectly charged directly to Retained Earnings.
2. Fully depreciated plant assets that cost $57,000 were sold during 2007 for $2,000. The gain (not extraordinary) was incorrectly charged directly to Retained Earnings.
3. Net income as reported on the income statement for the year was $40,000.
4. Dividends paid amounted to $20,000.
5. Depreciation charged for the year was $43,000.
Instructions - Prepare a statement of cash flows for the year 2007 using the indirect method.