The following account balances are taken from the records of Martin Corp. for the past two years.

Other information available for 2010 is as follows:
a. Net income for the year was $200,000.
b. Depreciation expense on plant and equipment was $50,000.
c. Plant and equipment with an original cost of $150,000 were sold for $64,000. (You will need to determine the book value of the assets sold.)
d. Amortization expense on patents was $8,000.
e. Both new plant and equipment and patents were purchased for cash during the year.

Required
Indicate, with amounts, how all items related to these long-term assets would be reported in the 2010 statement of cash flows, including any adjustments in the Operating Activities section of the statement. Assume that Martin uses the indirectmethod.

Transcribed Image Text:

December 31 2010 750,000 160,000 92,000 825,000 2009 Plant and equipment Accumulated depreciation Patents Retained earnings S 500,000 200,000 0,000 675,000