PROBLEM

ABC Corporation accountants have assembled the following data for the year ended December 31, 2007.

REQUIRED:

Prepare ABC Corporation's statement of cash flows using the indirect method.  Include an accompanying schedule of noncash investing and financing activities.

                                                                                    12/31/07                     12/31/06

Current Accounts:

Current assets:

            Cash and cash equivalents                           $85,000                       $22,000

            Accounts receivable                                        69,200                         64,200

            Inventories                                                       80,000                         83,000

Current liabilities:                 

            Accounts payable                                          $57,800                       $55,800

            Income tax payable                                         14,700                         16,700

Transaction data for 2007:

Net income                                        $  57,000         Purchase of treasury stock   $14,000

Issuance of common stock for cash      41,000        Loss on sale of equipment       11,000

Depreciation expense                            21,000        Payment of cash dividends     18,000         

Purchase of building                            125,000        Issuance of long-term note             

Retirement of bonds payable by                                  payable to borrow cash      34,000

     issuing common stock                       65,000        Sale of equipment                    58,000