Satu Co. a merchandiser, recently completed its 2008 operations. For the year, (1) all sales are credit sales, (2) all credits to Accounts Recievable reflect cash reciepts from customers, (3) al purchases of inventory are on credit, (4) all debits to Accounts Payable reflect cash payments for inventory, (5) Other Expenses are cash expenses, and (6) any change in Income Taxes Payable reflects the accrual and cash payment of taxes. Satu's balance sheets and income statement follow.

Satu Company
Comparative Balance Sheets
Dec. 31, 2008 and 2007

ASSETS... 2008 2007

Cash... $ 58,750 $ 26,400
Accounts Recievable... 20,222 25,860
Merchandise Inventory... 165,667 140,320
Equipment... 107,750 77,500
Accum. Depreciation-Equipment... (46,700) (31,000)
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Total Assets... $305,689 $241,080
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LIABILITIES AND EQUITY

Accounts payable... $20,372 $157,530
Income taxes payable... 2,100 6,100
Common stock, $5 par value... 40,000 25,000
Paid in capital in excess
of par, common stock... 68,000 20,000
Retained earnings... 175,217 32,450
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Total liabilities and equity... $305,689 $241,080
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Satu Company
Income Statement
For the Year Ended Dec 31, 2008

Sales... $750,800
Cost of goods sold... 269,200
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Gross profit... 481,600
Operating expenses
Depreciation expenses... $15,700
Other expenses... 173,933 189,633
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Income before taxes... 291,967
income taxes expense... 89,200
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Net Income... $202,767
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ADDITIONAL INFO ON YEAR 2008 TRANSACTIONS
a. Purchased equipment for $30,250 cash
b. Issued 3,000 shares of common stock for $21 cash per share
c. Declared and paid $60,000 of cash dividends

REQUIRED
Prepare a complete staement of cash flows; report its cash inflows and cash outflows from operating activities according to the indirect method.

We won't do this for you as the rules of the site require you do your own homework. We are here to guide you and to check your work. I will get you started. The indirect method starts with Net Income, and it is adjusted for Income Statement items that don't require cash flow (such as depreciation) and Balance Sheet items that do affect cash flow. A good place for you to start is to calculate the difference in your balance sheet items and then determine which items on the Balance Sheet and Income Statement are going to affect cash versus those that won't. If you'll do that and show your work, we can see if you are understanding so far.