Using indirect method form a statement of cash flows

Question

Using the indirect method, prepare a statement of cash flows for 2007.

Problem 1: Prepare a statement of Cash Flows (Indirect Method)

Comparative financial statement data for Holly Company

31-Dec

                                                               2007              2006
Cash                                                          4                   7
Accounts Recievable                                   36                 29
Inventory                                                  75                  61
Plant and Equipment                                  210                180
Accumulated Depreication                          -40                 -30
Total Assets                                              285                247
Accounts Payable                                       45                  39
Common Stock                                          90                  70
Retained Earnings                                     150                138
Total liabilities and stockholder's equity      285                 247

For 2007, the company reported net income as follows:

Sales                                   500
Cost of Goods Sold               300
Gross Margin                        200
Selling and admin expense    180
Net Income                           20

Dividends of $8 were declared and paid during 2007.

Required: Using the indirect method, prepare a statement of cash flows for 2007.