On the Basis of the Following Data for Breach Co

question 22

Essay

On the basis of the following data for Breach Co. for the year ended December 31, 2011 and the preceding year, prepare a statement of cash flows using the indirect method of reporting cash flows from operating activities.
 Assume that equipment costing $25,000 was purchased for cash and no long term assets were sold during the period.
 Stock was issued for cash - 3,200 shares at par.
 Net income for 2010 was $76,000.
 Cash dividends declared and paid were $13,000.

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Definitions:

Economic Recession

A significant decline in economic activity spread across the economy, lasting more than a few months, typically visible in GDP, real income, employment, industrial production, and wholesale-retail sales.

Keynesian View

An economic theory proposing that government intervention, through monetary and fiscal policy, can mitigate the adverse effects of recessions and depressions.

Balanced Budget

A financial statement demonstrating that revenues and expenditures are equal, leading to no deficit for the period.

Fiscal Policy

Government strategies for adjusting its spending levels and tax rates to influence a nation's economy.