Galley Corp., a merchandiser, recently completed its 2011 operations. For the year,

(1) All sales are credit sales,

(2) All credits to Accounts Receivable reflect cash receipts from customers,

(3) All purchases of inventory are on credit,

(4) All debits to Accounts Payable reflect cash payments for inventory,

(5) Other Expenses are all cash expenses, and

(6) Any change in Income Taxes Payable reflects the accrual and cash payment of taxes. The company’s balance sheets and income statement follow.

Additional Information on Year 2011 Transactions
a. Purchased equipment for $36,000 cash.
b. Issued 12,000 shares of common stock for $5 cash per share.
c. Declared and paid $111,000 in cash dividends.

Required
Prepare a complete statement of cash flows; report its cash inflows and cash outflows from operating activities according to the indirectmethod.

GALLEY CORPORATION Comparative Balance Sheets December 31,2011 and 2010 2011 2010 Assets Cash. Accounts recelvable... .$ 174,000 $117,000 93,000 81.000 609,000 534,000 333,000 297,000 GALLEY CORPORATION Income Statement For Year Ended December 31,2011 quipment Accum. depreclation Equipment(56,000) (102.000) Total assets Liablities and Equity Accounts payable 69,000 $96,000 Gross profit Income taxes payable Common stock $2 par value582.000 8,Depreclation expense... $54,000 Paid-In capital in excess $1,053,000 $927000 Sales....a. $1,992,000 1,194,000 798,000 Cost of goods sold 27,000 24000 Operating expenses Other expenses.501000 555,000 243,000 42,000 $ 201.000 on stock 98,000 162,000 Income before taxes .. Retained earnings........177,000 87.000 Income taxes expense Total liabilities and equity. . . $1,053,000 $927,000 Net Income . . . . .. . ..