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# Statement of Cash Flows Indirect Method

The comparative balance sheets for Lopez Ceramics, Inc., for December 31, 2010 and 2009, are as shown below:

During 2010, the company had net income of \$48,000 and building and equipment depreciation expenses of \$40,000 and \$30,000, respectively. It amortized intangible assets in the amount of \$10,000; purchased investments for \$58,000; sold investments for \$75,000, on which it recorded a gain of \$17,000; issued \$120,000 of long-term bonds at face value; purchased land and a warehouse through a \$160,000 mortgage; paid \$20,000 to reduce the mortgage; borrowed \$30,000 by issuing notes payable; repaid notes payable in the amount of \$90,000; declared and paid cash dividends in the amount of \$18,000; and purchased treasury stock in the amount of \$10,000.

1. Using the indirect method, prepare a statement of cash flows for Lopez
2. Compute and assess cash flow yield and free cash flow for 2010. If required, use the minus sign to indicate a negative free cash flow. If an amount is not meaningful, enter "0".

#### Solution Summary

The solution provides the statement of cash flows using the indirect method.

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