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Saferoad Corporation: create indirect presentation cash flow

Saferoad Corporation has completed its comparative balance sheet and income statement at year-end 2009. Additional information:
?   A payment of 57,500 was made on the loan principal during the year.
?   Just before year-end, a dividend was distributed to stockholders.
?   A parcel of land was acquired early in the year.
?   New shares of common stock were sold during the year.

Comparative Balance Sheet 31-Dec
2009 2008
Cash $1,090 $4,000
Accounts receivable $2,910 $6,150
Inventory $4,800 $3,880
Prepaid advertising $700 $1,775
Buildings and furnishings $40,000 $40,000
Accumulated depreciation ($10,000) ($8,000)
Land $27,000 $15,000
TOTAL ASSETS $66,500 $62,805
Rent payable $2,000 $4,000
Taxes payable $1,900 $1,500
Wages payable $3,300 $2,200
Loan payable, long-term $19,600 $26,805
Common stock $31,000 $25,000
Retained earnings $8,700 $3,300
TOTAL LIABILITIES AND EQUITY $66,500 $66,500 $62,805

Income Statement for 2009
Sales Revenue $350,000
Cost of goods sold $250,600
Gross profit $99,400
Operating expenses:
Advertising $9,500
Depreciation $2,000
Insurance $4,100
Rent $28,900
Wages $40,450
Operating income $14,450
Interest expense $1,600
Income before tax $12,850
Taxes $3,850
Net Income $9,000

Solution Summary

Cash flow is created from data given with notes and guidance about why each line is needed. A general "rule" is shared that helps to figure out if you add or subtract on reconciling items.

$2.19