The following is selected information from Murphy Company for the fiscal years ended December 31, 2015:

Murphy Company had net income of $500,000.

Depreciation was $50,000, purchases of plant assets were $ 250,000, and disposals of plant assets for $500,000 resulted in a $20,000 gain.

The stock was issued in exchange for an outstanding note payable of $925,000.

Accounts receivable decreased by $25,000.

Accounts payable decreased by $10,000.

Dividends of $200,000 were paid to shareholders.

Murphy Company had an interest expense of $5,000.

Cash balance on January 1, 2015 was $250,000.

Requirements:

Prepare Murphy Company's statement of cash flows for the year ended December 31, 2015 using the indirect method.

Answer rating: 100% (QA)

Answer I The statement of cash flow is a powerful accounting tool which combines the operations of t... View the full answer