Consider the following comparative balance sheets for the Midland Manufacturing Corporation.

Midland Manufacturing Corporation
Comparative balances (in millions of dollars)*
	December 31,		December 31,
	Year 1		year 2
Assets
Current assets:
Money	$ 4.4		$ 0.6
Accounts receivable, net	7.4		7.6
inventories	14.5		14.7
Total current assets	$26.3		$22,9
Property and equipment	$80.6		$114.8
Less: Accumulated depreciation	16.4		25,5
Net assets and equipment	$64.2		$89.3
total assets	$90.5		$112.2
Liabilities and Equity
current liabilities:
Accounts payable	$ 8.1		$ 9.3
Other current liabilities	5.7		8.5
Total current liabilities	$13.8		$17.8
long term debt	18.1		31.1
Deferred federal income taxes	$1.0		$1.6
Equity:
Common actions	$ 3.3		$ 3.3
Additional payment in principal	27,9		27,9
Retained earnings	26.4		30.5
Equity of total shareholders	$57.6		$61.7
Total liabilities and stockholders' equity	$90.5		$112.2
Net income for the year ended December 31, Year 2 totaled $7.8 million; dividends paid during the same period amounted to $3.7 million; $1.7 million of long-term debt was retired in year 2; and fixed assets were sold during year 2 for $0.7 million.

Prepare a statement of cash flows (using the indirect method) for Midland Manufacturing Corporation for the year ending December of Year 2, based on the comparative balance sheets shown above. Use the minus sign to indicate cash outflows. 

Answer rating: 100% (QA)

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