Problem 5.Statement of cash flows (20 points)

The balance sheets for Kinder Company showed the following information. Additional information concerning transactions and events during 2018 are presented below.

Kinder Company

Balance Sheet

December 31

20182017

Cash$30,900$10,200

Accounts receivable43,30020,300

Inventory35,00042,000

Available-for-sales debt investments015,000

Property, plant & equipment236,500150,000

Accumulated depreciation(37,700)(25,000)

$308,000$212,500

Accounts payable$17,000$26,500

Notes payable, short-term (nontrade, financing purpose)21,00017,000

Long-term notes payable70,00050,000

Common stock130,00090,000

Retained earnings70,00029,000

$308,000$212,500

Additional data:

1.Net income for the year 2018, $61,000.

2.Depreciation on plant assets for the year, $12,700.

3.Sold investments (available-for-sale) for $33,000 cash ($18,000 above cost). The cost of these investments was $15,000.

4.Paid cash dividends of $20,000.

5.The $86,500 increase in property, plant and equipment is due to acquisition of a new equipment. Kinder paid $26,500 in cash and issued $60,000 long-term note for the remaining amount. Kinder did not sell any plant assets during the year.

7. Paid a $40,000 long-term note payable by issuing common stock.

Instructions

Using the format provided on the next page, prepare statement of cash flows (using the indirect method) for 2018 for Kinder Company. Show related calculations.