Condensed financial data of Arma Inc. follow.
| ARMA INC. | |||
| Comparative Balance Sheets | |||
| December 31 Don't use plagiarized sources. Get Your Custom Essay on arma inc indirect and direct method cash flow correct w solutions 496107 For $10/Page 0nly | |||
| Assets | 2011 | 2010 | |
| Cash | $90,800 | $48,400 | |
| Accounts receivable | 92,800 | 33,000 | |
| Inventories | 112,500 | 102,850 | |
| Prepaid expenses | 28,400 | 26,000 | |
| Investments | 138,000 | 114,000 | |
| Plant assets | 270,000 | 242,500 | |
| Accumulated depreciation | (50,000) | (52,000) | |
| Total | $682,500 | $514,750 | |
| Liabilities and Stockholders’ Equity | |||
| Accounts payable | $112,000 | $67,300 | |
| Accrued expenses payable | 16,500 | 17,000 | |
| Bonds payable | 110,000 | 150,000 | |
| Common stock | 220,000 | 175,000 | |
| Retained earnings | 224,000 | 105,450 | |
| Total | $682,500 | $514,750 |
| ARMA INC. | |||
| Income Statement | |||
| For the Year Ended December 31, 2011 | |||
| Sales | $392,780 | ||
| Less: | |||
| Cost of goods sold | $135,460 | ||
| Operating expenses, excluding depreciation | 12,410 | ||
| Depreciation expense | 46,500 | ||
| Income taxes | 27,280 | ||
| Interest expense | 4,730 | ||
| Loss on sale of plant assets | 7,500 | 233,880 | |
| Net income | $158,900 |
Additional information:
Complete the statement of cash flows using the indirect method and direct method
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