The following information was taken from the records of Glassett Produce Company for the year ended June 30, 2011.
Borrowed on long-term notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $15,000
Issued capital stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45,000
Purchased equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18,000
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32,000
Purchased treasury stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,000
Paid dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29,000
Depreciation expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21,000
Retired bonds payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65,000
Patent amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,000
Sold long-term investment (at cost) . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,200
Increase in cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13,300
Decrease in inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,300
Increase in accounts receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,200
Increase in accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,000
Cash balance, July 1, 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22,000
Instructions:
1. From the information given, prepare a statement of cash flows using the indirect method.
2. Briefly explain what an interested party would learn from studying the cash flow statement for Glassett Produce Company.