Question - The following information pertains to Surrey Honda Ltd., a local car dealership, for the year ended December 31, 2011:

Surrey Honda Ltd. Balance Sheet December 31, 2011 (in thousands of $)

2011 2010

ASSETS

Cash 526 482

Accounts receivable - net 175 185

Inventory 985 925

Long term investment 145 180

Land 425 350

Equipment 1,045 960

Accumulated amortization - equipment (350) (275)

Total assets $ 2,951 $ 2,807

LIABILITIES AND OWNER'S EQUITY

Accounts payable 321 850

Dividends payable 10 15

Current portion of long term debt 150 0

Long term note payable - 8% 300 0

Bond payable 500 500

Premium on bonds payable 14 18

Future income tax 85 70

Common stock 825 745

Retained earnings 746 609

Total liabilities and owner's equity $ 2,951 $ 2,807

Surrey Honda Ltd. Income Statement Year Ended Dec. 31, 2011 (in thousands of $)

NET SALES $ 1,875

COST OF GOODS SOLD 1,243

GROSS PROFIT 632

OPERATING EXPENSES

Amortization of capital assets 123

Other 25 148

NET OPERATING INCOME 484

OTHER REVENUES AND EXPENSES

Gain on disposal of long term investment 10

Gain on sale of equipment 15

Interest expense (65)

NET INCOME BEFORE TAX 444

INCOME TAX (current and future) 133

NET INCOME $ 311

OTHER INFORMATION:

1. During 2011, the company purchased new equipment for $ 270,000 cash. Old equipment was sold for cash.

2. Common stock with a market value of $ 75,000 was issued in exchange for land during 2011.

3. $150,000 of the $450,000 long term note payable is due in 2009.

4. Cash dividends were declared and paid in 2011. No share dividends were declared.

REQUIRED: Using the financial statements and information provided, prepare in good form the Statement of Cash Flows for Surrey Honda Ltd. for the year ended December 31, 2011 using the indirect method.