Sparkling Cleaner Company reported net income of $7,450 for 2011 but has been showing an overdraft in its bank account in recent months. The manager has contacted you as the auditor for an explanation. The comparative balance sheet was given to you for examination, along with the following information.
(a) Equipment was sold for $1,700, its cost was $3,000, and its book value was $800. The gain was reported as Other Revenue.
(b) Cash dividends of $4,870 were paid.

Instructions:
Prepare a statement of cash flows using the indirectmethod.

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Sparkling Cleaner Company Comparative Balance Sheet Dec. 31, 2011 Dec. 31, 2010 Current assets: (1.100) 4,100 3,250 $ 6,340 $15,200 3,950 2,300 .150 210 7,610 Prepaid insurance Total current assets Land, buildings, and equipment: $15,200 Buildings .35,000 $35,000 (6,500) 18.500 (00) 20,000 Equipment 28,350 24.150 (20,900) 7450 (17900) 6,250 $41,450 $41,50 AL AEO $49,060 Total assets $47.490 Liabilities and Stockholders' Equity Current liabilities: Accounts payable Income taxes payable Wages payable 3.600 950 I.100 3,000 2,800 ,850 2,150 4,500 $11,300 Total current liabilities 8.650 Long-term liabilities: Notes payable 1,250 14,250 Stockholders' equity: Capital stock Retained earnings Total stockholders' equity . 19,500 8,090 $ 18,000 5,510 27,590 23,510 $49,060 Total liabilities and stockholders' equity $47490