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    statement of cash flows

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    2. The comparative balance sheets for Gallup Company appear below:
    GALLUP COMPANY
    Comparative Balance Sheet
    Dec. 31, 2010 Dec. 31, 2009
    Assets
    Cash $ 28,000 $13,000
    Accounts receivable 18,000 14,000
    Prepaid expenses 7,000 9,000
    Inventory 25,000 15,000
    Long-term investments -0- 18,000
    Equipment 60,000 30,000
    Accumulated depreciationâ?"equipment (18,000) (14,000)
    Total assets $120,000 $85,000

    Liabilities and Stockholders' Equity
    Accounts payable $ 25,000 $ 7,000
    Bonds payable 37,000 45,000
    Common stock 40,000 23,000
    Retained earnings 18,000 10,000
    Total liabilities and stockholders' equity $120,000 $85,000

    Additional information:
    1. Net income for the year ending December 31, 2010, was $25,000.
    2. Cash dividends of $17,000 were declared and paid during the year.
    3. Long-term investments that had a book value of $18,000 were sold for $16,000.
    4. Sales for 2010 are $120,000.

    Instructions
    1. Prepare a statement of cash flows for the year ended December 31, 2010, using the indirect method.

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    This posting formulates a statement of cash flows.

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