# Condensed financial data of Arma Inc. follow. - 10365

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 Question 4

 Correct.

Condensed financial data of Arma Inc. follow.

 ARMA INC. Comparative Balance Sheets December 31 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

1. New plant assets costing \$85,000 were purchased for cash during the year.
2. Old plant assets having an original cost of \$57,500 were sold for \$1,500 cash.
3. Bonds matured and were paid off at face value for cash.
4. A cash dividend of \$40,350 was declared and paid during the year.

Complete the statement of cash flows using the indirect method.  (List amounts from largest positive to smallest positive followed by most negative to least negative, e.g. 15, 14, 10, -17, -5, -1. If amount decreases cash flow, use either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)

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