Presented Below Are the Comparative December 31 Financial Statements for Martin

Essay

Presented below are the comparative December 31 financial statements for Martin Industries, Inc. (in $ Millions). Prepare a statement of cash flows for December 31, Year 2 using the indirect method.
$\begin{array}{c}\text { Martin Industries, Inc.}\\\text { Balance Sheets}\\\text { At December 31, Year 2 and Year 1}\\\begin{array}{lrr}&\underline{\text { Year } 2} & \underline{\text{Year} 1}\\\text { Cash } & \$ 96,719 & \$ 28,694 \\\text { Accounts Receivable } & 100,000 & 85,313 \\\text { Inventory } & 206,250 & 181,250 \\\text { Prepaid Insurance } & 1,875 & 2,500 \\\text { Long-term Investments } & 19,375 & 106,250 \\\text { Land, Buildings, and Equipment } & 1,562,500 & 1,406,250 \\\text { Accumulated Depreciation } & (762,500) & (715,000)\\\\\text { Total Assets }&\$ 1,224,219& \$ 1,095,257\\\\\text { Accounts Payable } & \$ 95,425 & \$ 185,838 \\\text { Salaries Payable } & 25,000 & 30,625 \\\text { Notes Payable (long-term) } & 31,250 & 93,750 \\\text { Bonds Payable } & 250,000 & - \\\text { Common Stock } & 375,000 & 375,000 \\\text { Retained Earnings } & \underline{447,544} & \underline{410,044} \\& \underline{\$ 1,224,219} & \underline{\$ 1,095,257}\end{array}\end{array}$

Additional information for Year 2
(1) Sold available for sale securities costing $86,875 for $92,500.
(2) Equipment costing $25,000 with a book value of $6,250 was sold for $7,500
(3) Issued 8% bonds at face value for $250,000.
(4) Purchased new equipment for $181,250 and paid cash.
(5) Paid cash dividends of $25,000.
(6) Net income was $62,500.