E23-11 (SCF—Indirect Method) Condensed financial data of Pat Metheny Company for 2008 and 2007 are presented below.

E23-11

LO 6 (SCF--Indirect Method)
Condensed financial data of Pat Metheny Company for 2008 and 2007 are presented below.
PAT METHENY COMPANY
COMPARATIVE BALANCE SHEET
AS OF DECEMBER 31, 2008 AND 2007
$ 2,008 $ 2,007
Cash $ 1,800 $ 1,150
Receivables $ 1,750 $ 1,300
Inventory $ 1,600 $ 1,900
Plant assets $ 1,900 $ 1,700
Accumulated depreciation $ (1,200) $ (1,170)
Long-term investments (Held-to-maturity) $ 1,300 $ 1,420
$ 7,150 $ 6,300
Accounts payable $ 1,200 $ 900
Accrued liabilities $ 200 $ 250
Bonds payable $ 1,400 $ 1,550
Capital stock $ 1,900 $ 1,700
Retained earnings $ 2,450 $ 1,900
$ 7,150 $ 6,300

PAT METHENY COMPANY
INCOME STATEMENT
FOR THE YEAR ENDED DECEMBER 31, 2008
Sales $ 6,900
Cost of goods sold $ 4,700
Gross margin $ 2,200
Selling and administrative expense $ 930
Income from operations $ 1,270
Other revenues and gains
Gain on sale of investments $ 80
Income before tax $ 1,350
Income tax expense $ 540
Net income $ 810
Cash dividends $ 260
Income retained in business $ 550

Additional information:
During the year, $70 of common stock was issued in exchange for plant assets. No plant assest were sold in 2008.

Instructions
Prepare a statement of cash flows using the indirect method. 

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