prepare the statement of cash flows a separate schedule reconciling net income to ca 610557

Comprehensive – The following are the December 31, 2006 post-closing trial balance and the December 31, 2007 adjusted trial balance of the Adair Company:

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Accounts	Debit	Credit	Debit	Credit
Cash	2,700	3,300
Accounts receivable	7,300	6,200
Inventory	8,100	9,900
Investments in bonds	10,000	18,600
Property and equipment	105,300	133,300
Accumulated depreciation	42,400	49,200
Accounts payable	8,100	8,500
Salaries payable	1,300	700
Interest payable	0	300
Notes payable	0	9,000
Common stock, no par	43,600	58,100
Retained earnings	38,000	31,500
Sales	89,000
Cost of goods sold	48,800
Depreciation expense	6,800
Salaries expense	12,000
Other operating expenses	1,700
Interest revenue	1,200
Interest expense	900
Income tax expense	6,000
Totals	133,400	133,400	247,500	247,500

A review of the accounting records reveals the following additional information for 2007:

(a) Investments in bonds to be held to maturity were purchased at year-end for $8,600.

(b) A building was purchased for $28,000.

(d) Common stock was issued for $14,500.

(e) Dividends of $6,500 were declared and paid.

Required

1. Using the direct method for operating cash flows, prepare a worksheet (spreadsheet) to support the 2007 statement of cash flows for the Adair Company.

2. Prepare the statement of cash flows. (A separate schedule reconciling net income to cash provided by operating activities is not necessary.)

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