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Statement of cash flows / Indirect Method and direct method

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Condensed financial data of Shake It Up Inc. for 2010 and 2009 are presented below.

Shake It Up Inc.
Comparative Balance Sheet
As of December 31, 2010 and 2009
2010 2009
Cash $ 1,790 $ 1,165
Receivables 1,712 1,288
Inventory 1,621 1,912
Plant assets 1,880 1,675
Accumulated depreciation (1,180) (1,130)
Long-term investments (Held-to-maturity) 1,360 1,460
$ 7,183 $ 6,370
Accounts payable $ 1,182 $ 990
Accrued liabilities 200 240
Bonds payable 1,410 1,575
Capital stock 1,895 1,665
Retained earnings 2,496 1,900
$ 7,183 $ 6,370
Shake It Up Inc.
Income Statement
For the Year Ended December 31, 2010
Sales $ 6,850
Cost of goods sold 4,565
Gross margin 2,285
Selling and administrative expenses 925
Income from operations 1,360
Other revenues and gains
Gain on sale of investments 85
Income before tax 1,445
Income tax expense 578
Net income 867
Cash dividends 271
Income retained in business $ 596

Additional information:

During the year, $71 of common stock was issued in exchange for plant assets. No plant assets were
sold in 2010.

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Solution Summary

The statement of cash flows for indirect and direction methods are examined.

$2.19