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Operating Cash Flow Section of the CF Statement -Indirect

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Condensed financial statements for Dragon Enterprises follow.
(A) Calculate the amount of dividends Dragon paid using the information given.
(B) Prepare the Operating Cash Flow Section of the statement of cash flows using the indirect method.
Comparative Balance sheets Dec 31, 2009 and 2008
2009 2008
Cash 1,200 850
Accounts receivable 1,750 1200
Inventory 1250 1360
Plant and Equipment 4600 3900
Accumulated Depreciation -1200 -1100
Long-Term investments 970 1110
Total Assets 8570 7320
Accounts Payable 1100 800
Accrued wages payable 250 350
Interest payable 70 120
Income tax Payable 200 50
Bonds Payable 1100 1400
Capital Stock 1000 930
Paid-in capital 400 70
Retained Earnings 4450 3600
Total Liabilities and Equity 8570 7320

Income Statement for year ended December 31, 2009
Sales 9500
Cost of Good sold 6650
Gross profit 2850
Other Expenses
Selling and Administrative 1200
Depreciation 100
Interest 150
Income tax 350
Net Income 1050

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Solution Summary

Use of an income statement and balance sheet to create the Cash Flow Statement using the Indirect Method and Calculation of the dividends paid.

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