The following information relates to activities for Freeland Limited for 2008.
Net income for the year ended December 31, 2008, was $45,000.
An additional piece of land was purchased on November 30, 2008. The purchase price
was paid in cash. Property taxes for 2008 were $16,400. They were paid in cash and
included in the calculation of net income.
During the year, a piece of equipment was sold for $15,000, received in cash. Any gain or
loss on the sale was included in net income. A new piece of equipment costing $40,000
was purchased in April. The seller of the equipment accepted a long-term note payable as
full payment. Interest is payable annually on the note and the interest expense of $2,000
for 2008 was included in net income.
Dividends were paid in cash on December 1.
Capital stock was issued on September 30.
The company retired $10,000 of bonds on March 15 when they matured. The company
issued new bonds on October 1. The new bonds have a ten-year life. Both transactions
occurred at the par (i.e., face or stated) value.
Selected account balances at December 31, 2007 and 2008 are shown in the following table. All
account balances have the usual sign.
Accumulated amortization, equipment
Amortization expense, equipment
Long-term notes payable
Prepare the statement of cash flows for Freeland Limited for 2008 using the indirect method.
Please use the table on the following page to complete this question.