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# Cash flow statement by indirect method

I would like help with this accounting problem for my better understanding of cash flows using the indirect method of presenting cash flows from operating activities.

The comparative balance sheet of Oak and Title Flooring Co.for June 30, 2008 and 2007 is as follows:
ASSETS JUNE 30,2008 JUNE 30, 2007

Cash....................................\$ 34,700 \$ 23,500
Accounts receivable (net) 101,600 92,300
Inventories.............................146,300 142,100
Investments...................................0 50,000
Land....................................145,000 0
Equipment...............................215,000 175,500
Accumulated depreciation................(48,600) (41,300)
__________ _________
\$594,000 \$442,100
__________ _________
___________ _________

LIABILITIES AND STOCKHOLDER'S EQUITY
Accounts payable ( merchandise creditors)\$100,900 \$95,200
Accrued expenses (operating expenses) 15,000 13,200
Dividends payable...........................12,500 10,000
Common stock,\$1 par.........................56,000 50,000
Paid-in capital in excess of parcommon stock220,000 100,000
retained earnings...........................189,600 173,700
______ __________
\$594,000 \$442,100
_________ ___________
___________ ____________

The following information was taken from the records of Oak and Tile Flooring Co.:
a. Equipment and Land were acquired for cash
b.There were no disposal of equipment during the year.
c.The investments were sold for \$45,000 cash.
d.The common stock was issued for cash.
e.There was a \$65,900 credit to retained Earnings for net income.
f.There was a \$50,000 debit to retained Earnings for cash dividends declared.

Prepare a statement of cash flows, using the indirect method of representing cash flows from operating activities.

#### Solution Summary

The solution contains the preparation of cash flow statement by indirect method when the balance sheet and other information are given.

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