Statement of Cash Flows

Dear Brainmass,

I am having some difficulty in understanding this problem on Statement of Cash Flows. Please see the attached file for further details. I would really appreciate the assistance when you get the time. Thank you in advance for reviewing my post.

Statement of Cash Flows

The condensed financial statements of Danielle Manufacturing Company for the years ended December 31, 2006 and December 31, 2005 are as follows:

Danielle Manufacturing Company
Comparative Balance Sheet
December 31, 2006 and 2005

2006 2005 Difference

Cash and short term investments $321,600 $76,800 $244,800
Accounts receivables (net) $246,400 $98,000 $148,400
Inventories (LIFO - lower of cost or market) $225,000 $115,800 $109,200
Investments - Available for sale $180,000 $202,000 ($22,000)
Plant Assets $480,000 $425,000 $55,000
Accumulated Depreciation ($60,000) ($104,000) ($44,000)
_______________________________
Total Assets $1,393,000 $813,600 $579,400

Accounts Payable and accrued expenses $200,000 $130,400 $69,600
Mortgage Payable $100,000 $154,000 ($54,000)
Common stock and paid in capital $350,000 $262,200 $87,800
Retained Earnings $743,000 $267,000 $476,000
_______________________________
Total Liabilities and stockholder's equity $1,393,000 $813,600 $579,400

Danielle Manufacturing Company
Income Statement
For the Year Ended December 31, 2006

Net Sales $880,000
Cost of goods manufactured $260,000
Depreciation of plant assets $84,000 $344,000
_______ _______
Gross profit on sales $536,000

Selling and administrative expenses $20,000

Other (income) and expenses:
Interest and other revenue ($30,000)
Gain on sale of investments ($10,000)
Interest expense $6,000
Loss on sale of assets $24,000 ($10,000)
______ _______
Income before tax expense $526,000
Income taxes $10,000
_______
Net Income $516,000
Cash dividends paid $40,000
_______
Income retained in the business $476,000

Additional Information:

1. No unrealized gains or losses have occurred on the available for sale securities.

2. Investments were sold during the year.

3. Plant assets in the amount of $210,000 were purchased during the year: $170,000 for cash and $40,000 in exchange for the company's common stock.

Required:

Prepare a statement of cash flows using the indirect method. Show all calculations.