Prepare a complete statement of cash flows, report its operating activities using the indirect method.

Question 1 (of 2) velue: 4.50 points Problem 12-1A Statement of cash flows (indirect method) LO. A1, P1, P2, P3 Kazaam Company, a merchandiser, recently completed its calendar-year 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, and (5) Other Expenses are paid in advance and are initially debited to Prepaid Expenses. The company's balance sheets and income statement follow KAZAAM COMPANY Comparative Balance Sheets December 31, 2011 and 2010 2011 2010 Assets Cash Accounts receivable Merchandise inventory 50,000 $ 73,500 56,000 277,000 252,000 1,800 157,500 107.500 (36,375) (46,000) 65,830 Prepaid expenses 1,500 Equipment Accum. depreciation-Equipment Total assets $515,455 $444,800 Liabilities and Equity Accounts payable Short-lerm notes payable Long-term notes payable Common stock, $5 par value Paid-in capital in excess of par, common stock Retained earnings $ 61,130 $113,000 8,000 48,750 162,750150,500 11,000 60,000 183,820 124,550 36,750 83,825 124,550 S515,455 $444.800 Total liabilities and equity KAZAAM COMPANY