Prepare the cash flow statement for Norwich Manufacturing, Inc. under the direct method using the information provided in P22-7. Provide all required disclosures.

In P22-7

Norwich Manufacturing, Inc. provided you with the following comparative balance sheets and income statement.

                Norwich Manufacturing, Inc.

                        Income Statement

            For the Year Ended December 31

                            Current Year

Sales……………………………………………..       $ 2,433,244

Cost of Goods Sold…………………………........     1,459,946

Gross Profit………………………………….........     $ 973,298

Selling, General, and Administrative Expenses…..     $ 59,800

Pension Expense…………………………………..    260,510

Bad Debt Expense………………………………...    1,650

Depreciation Expense……………………………..    19,470

Amortization Expense……………………………..    7,425

Total Operating Expenses…………………………    $ 348,855

Income before Interest and Taxes…………………   $ 624,443

Interest Expense…………………………………..    $ (55,110)

 Interest Revenue 0 Investment Income

(includes Gain on Sale)…………………………...     55,000

Equity Earnings from Affiliate Companies……….   164,500

Income before Tax…………………………………   $ 788,833

Income Tax Expense……………………………….  (301,873)

Net Income…………………………………………             $ 486,960

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Norwich Manufacturing, Inc. Balance Sheets At December 31 Assets Current Year Pror Year Current Assets s 45000 22.000 2,000 58,000 Trading Investments at Fair Value Accounts Receivable, net Merchandise Inventory 95,000 135,000 95,000 S 333.000 254,000 Total Current Assets Noncurrent Assets Investments in Affiliate Companies Property, Plant, and Equipment net Intangible Assets net S 265,000 100,500 1530,500 97500125,000 S 1,717000 $1,756,000 $2,050,000 $2,010,000 1.364,500 , Total Noncurrent Assets Total Assets Liabilities Current Liabilities Current Portion of Long-term Debt Accounts Payable Dividends Payable Income Taxes Payable $ 25,000 65,800 128,500 187000 75,000 65,800 5500 Total Current Liabilities Noncurrent Liabilities Bonds Payable Less: Discount on Bonds Notes Payable Deferred Tax Liability Net Obligations under Pension Plans S 352,800 307800 00,000 400,000 128500) 145,000 225,500 62,500 225,000 Total Noncurrent Liabilities Total Liabilities 80,000 80.00 S 639,500 612,500 S 992,300 920,300 Shareholders' Equity S 135,000 135,000 400,000 523,700 48,500 Accumulated other Comprehensive Income(130,300) 79,500 $1,057,700 1,089,700 $2,050,000 $2,010,000 Common Stock, S1 par value Additional Paid-in Capital Retained Eamings Deferred Compensation 400,000 685,000 (32,000) Total Shareholders' Equity Total Liabilities and Shareholders' Equity