prepare statement of cash flow using direct method

P14.9A Condensed financial data of Arma Inc. follow. ARMA INC. Comparative Balance Sheets December 31 Assets 2008 Cash $ 90,800 Accounts receivable 92,800 Inventories 112,500 Prepaid expenses 28,400 Investments 138,000 Plant assets 270,000 Accumulated depreciation (50,000) Total $682,500 2007 $ 48,400 33,000 102,850 26,000 114,000 242,500 (52,000) $514,750 Liabilities and Stockholders' Equity Accounts payable Accrued expenses payable Bonds payable Common stock Retained earnings Total $112,000 16,500 110,000 220,000 224,000 $682,500 $ 67,300 17,000 150,000 175,000 105,450 $514,750 Proble $392,780 ARMA INC. Income Statement For the Year Ended December 31, 2008 Sales Less: Cost of goods sold Operating expenses, excluding depreciation Depreciation expense Income taxes Interest expense Loss on sale of plant assets Net income $135,460 12,410 46,500 27,280 4,730 7,500 233,880 $158,900 Additional information: 1. New plant assets costing $85,000 were purchased for cash during the year. 2. Old plant assets having an original cost of $57,500 were sold for $1,500 cash. 3. Bonds matured and were paid off at face value for cash. 4. A cash dividend of $40,350 was declared and paid during the year