1. Question Content Area

   Statement of Cash FlowsIndirect Method

   The comparative balance sheet of Yellow Dog Enterprises Inc. at December 31, 20Y8 and 20Y7, is as follows:

   		Dec. 31, 20Y8		Dec. 31, 20Y7
   Assets
   Cash		$66,320		$81,270
   Accounts receivable (net)		101,900		109,560
   Merchandise inventory		145,580		135,800
   Prepaid expenses		5,930		4,110
   Equipment		296,540		243,300
   Accumulated depreciation-equipment		(77,100)		(59,670)
   	Total assets	$539,170		$514,370
   Liabilities and Stockholders' Equity
   Accounts payable (merchandise creditors)		$113,230		$107,500
   Mortgage note payable		0		154,310
   Common stock, $1 par		18,000		11,000
   Paid-in capital: Excess of issue price over par-common stock		278,000		145,000
   Retained earnings		129,940		96,560
   	Total liabilities and stockholders equity	$539,170		$514,370

   Additional data obtained from the income statement and from an examination of the accounts in the ledger for 20Y8 are as follows:

   1. Net income, $85,450.
   2. Depreciation reported on the income statement, $37,620.
   3. Equipment was purchased at a cost of $73,430, and fully depreciated equipment costing $20,190 was discarded, with no salvage realized.
   4. The mortgage note payable was not due for six years, but the terms permitted earlier payment without penalty.
   5. 7,000 shares of common stock were issued at $20 for cash.
   6. Cash dividends declared and paid, $52,070.

   Required:

   Prepare a statement of cash flows, using the indirect method. Use the minus sign to indicate cash outflows, cash payments, decreases in cash, or any negative adjustments.

   Yellow Dog Enterprises Inc. Statement of Cash Flows For the Year Ended December 31, 20Y8

   Cash flows from operating activities:	blank
   Common stockDepreciation expenseInventoryNet incomePrepaid expensesRetained earnings	$- Select -
   Adjustments to reconcile net income to net cash flow from operating activities:	blank
   Cash used for dividendsDecrease in accounts receivableDepreciation expenseIncrease in accounts receivableNet incomeRetained earnings	- Select -
   Changes in current operating assets and liabilities:	blank
   Decrease in accounts payableDecrease in accounts receivableDecrease in inventoryDepreciation expenseIncrease in accounts receivable	- Select -
   Decrease in accounts payableDecrease in merchandise inventoryDecrease in prepaid expensesDepreciation expenseIncrease in accounts receivableIncrease in merchandise inventory	- Select -
   Decrease in accounts payableDecrease in inventoryDecrease in prepaid expensesIncrease in prepaid expenses	- Select -
   Decrease in accounts payableDecrease in prepaid expensesDepreciation expenseIncrease in accounts payableNet incomeRetained earnings	- Select -
   Net cash flow from operating activities	blank	$fill in the blank 13
   Cash flows from (used for) investing activities:	blank
   Cash paid for common stockCash used for equipmentCash used for dividendsCash paid for merchandise inventoryCash paid for prepaid expensesCash paid to retire mortgage note	$- Select -
   Net cash flow used for investing activities	blank	fill in the blank 16
   Cash flows from (used for) financing activities:	blank
   Cash received from customersCash received from depreciationCash received from dividendsCash received from net incomeCash received from retained earningsCash from sale of common stock	$- Select -
   Cash paid for accounts payableCash paid for common stockCash used for dividendsCash used for equipmentCash paid for inventoryCash paid for prepaid expenses	- Select -
   Cash paid for accounts payableCash paid for accumulated depreciationCash paid for common stockCash paid for depreciationCash paid for inventoriesCash used to retire mortgage note payable	- Select -
   Net cash flow used for financing activities	blank	fill in the blank 23
   Decrease in cashIncrease in cash	blank	$- Select -
   Cash at the beginning of the year	blank	fill in the blank 26
   Cash at the end of the year	blank	$fill in the blank 27