P13-9 Arma Inc

Price: $2.50

P13-9A Condensed financial data of Arma Inc. follow.

Arma Inc.
Comparative Balance Sheet
31-Dec
Assets			2,011	2,010
Cash			90,800	48,400
Accounts receivable			92,800	33,000
Inventories			112,500	102,850
Prepaid expenses			28,400	26,000
Investments			138,000	114,000
Plant assets			270,000	242,500
Accumulated depreciation			(50,000)	(52,000)
Total			682,500	514,750
Liabilities and S.E
Accounts payable			112,000	67,300
Accrued expenses payable			16,500	17,000
Bonds payable			110,000	150,000
Common stock			220,000	175,000
Retained earnings			224,000	105,450
Total			682,500	514,750
Arma Inc.
Income Statement
For the Year Ended December 31, 2011
Sales				392,780
Less:
Cost of goods sold			135,460
Operating expenses, excluding  dep.			12,410
Depreciation expense			46,500
Income taxes			27,280
Interest expense			4,730
Loss on sale of plant assets			7,500	233,880
Net income				158,900

Additional information:

1. New plant assets costing $85,000 were purchased for cash during the year.

2. Old plant assets having an original cost of $57,500 were sold for $1,500 cash.

3. Bonds matured and were paid off at face value for cash.

4. A cash dividend of $40,350 was declared and paid during the year.

Instructions

Prepare a statement of cash flows using the indirect method.