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    Talbot Corporation - Cash Flow Statement indirect method

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    The comparative balance sheets for Talbot Corporation show the following information:
    December 31
    2008 2007
    Cash $1,800 $1,050
    Accounts receivable 1,750 1,400
    Inventory 1,600 1,800
    Plant Assets 1,900 1,700
    Accumulated depreciation (1,200) (1,150)
    Long-term investments (Held-to-maturity) 1,300 1,320
    Totals $7,150 $6,120

    Accounts payable $1,200 $800
    Accrued liabilities 200 270
    Bonds payable 1,400 1,550
    Common stock 1,900 1,700
    Retained earnings 2,450 1,800
    Totals $7,150 $6,120

    Talbot Corporation
    Income Statement
    For the Year Ended December 31, 2008

    Sales $6,900
    Cost of goods sold 4,600
    Gross margin 2,300
    Selling and administrative expense 930
    Income from operations 1,370
    Other revenues and gains
    Gain on sale of investments 80
    Income before tax 1,450
    Income tax expense 540
    Net income 910
    Cash dividends 260
    Income retained in business $650

    Additional information:
    During the year, $70 of common stock was issued in exchange for plant assets. No plant
    assets were sold in 2008.

    Instructions:
    Prepare a statement of cash flows using the indirect method.

    TALBOT CORPORATION
    Statement of Cash Flows
    For the Year Ended December 31, 2008
    Cash flows from operating activities
    Net income Amount
    Adjustments to reconcile net income to net cash provided by operating activities:

    Text Title Amount
    Text Title Amount
    Text Title Amount
    Text Title Amount
    Text Title Amount
    Text Title Amount Formula
    Net cash provided by operating activities Formula

    Cash flows from investing activities
    Text Title Amount
    Text Title Amount
    Net cash provided by investing activities Formula

    Cash flows from financing activities
    Text Title Amount
    Text Title Amount
    Text Title Amount
    Net cash used by financing activities Formula

    Increase in cash Amount
    Cash, January 1, 2008 Amount
    Cash, December 31, 2008 Formula

    Noncash investing and financing activities
    Text Title Amount

    Instructions:
    Prepare a statement of cash flows using the direct method.
    (Do not prepare a reconciliation schedule).

    TALBOT CORPORATION
    Statement of Cash Flows
    For the Year Ended December 31, 2008
    Cash flows from operating activities
    Text Title Amount
    Text Title Amount
    Text Title Amount
    Text Title Amount Formula
    Net cash provided by operating activities Formula

    Cash flows from investing activities
    Text Title Amount
    Text Title Amount
    Net cash provided by investing activities Formula

    Cash flows from financing activities
    Text Title Amount
    Text Title Amount
    Text Title Amount
    Net cash used by financing activities Formula

    Increase in cash Amount
    Cash, January 1, 2008 Amount
    Cash, December 31, 2008 Formula

    Noncash investing and financing activities
    Text Title Amount

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    https://brainmass.com/business/financial-statements/talbot-corporation-cash-flow-statement-indirect-method-290002

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    Solution Summary

    The solution prepares cash flows using the indirect method for Talbot Corporation.

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