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Statement of Cash Flows

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Please follow the questions, and balance sheet and Income statement are attached.

Additional Information

1. There was no gain or loss on the sales of the long-term investments, nor on the bonds retired.

2. Old machinery with an original cost of $45,060 was sold for $2,520 cash.

3. New machinery was purchased for $81,060 cash.

4. Cash dividends of $ 40,320 were paid.

5. Additional shares of stock were issued for cash

Prepare a complete statement of cash flows for calendar-year 2009 using the indirect method.

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Solution Summary

Given a balance sheet and an income statement, this solution illustrates how to complete a statement of cash flows using the indirect method.

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Statement of Cash Flows: Time for change! SFAS No. 95

See attached file.

As contained in the Week Four electronic reserve readings article readings, this article, Broome, O. W. (2004, March/April). Statement of cash flows: Time for change! Financial Analysts Journal, 60(2), 16. , describes the current SFAS No. 95 requirements for the statement of cash flows, cites recent cases of abuse and disinformation involving the statement, and makes significant recommendations for improving the statement. Based on the comments in the article do you think the three sections of the statement of cash flows provide enough information for the reader? Of the three which provides the most information or is this an 'it depends' answer?

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