Chart and Summary of how the solution is gotten for the problem required E12-6:

The three accounts shown below and on page 626 appear in the general ledger of Cesar Corp. during 2007. Equipment Date Debit Credit Balance Jan.

1 Balance 160,000 July 31 Purchase of equipment 70,000 230,000 Sept.

2 Cost of equipment constructed 53,000 283,000 Nov.

10 Cost of equipment sold 49,000 234,000 Accumulated Depreciation- Equipment Date Debit Credit Balance Jan. 1 Balance 71,000 Nov. 10 Accumulated depreciation on equipment sold 30,000 41,000 Dec.

31 Depreciation for year 28,000 69,000 Retained Earnings Date Debit Credit Balance Jan. 1 Balance 105,000 Aug. 23 Dividends (cash) 14,000 91,000 Dec.

31 Net income 67,000 158,000 Instructions From the postings in the accounts, indicate how the information is reported on a statement of cash flows using the indirect method.

The loss on sale of equipment was $5,000. (Hint: Cost of equipment constructed is reported in the investing activities section as a decrease in cash of $53,000.)