Effects of Changes in Inventory and Accounts Payable Balances on Statement of Cash Flows Copeland Antiques reported a net loss of $33,200 for the year ended December 31, 2010. The following items were included on Copeland’s balance sheets at December 31, 2010 and 2009:

12/31/10 12/31/09 Cash $ 65,300 $ 46,100 Trade accounts payable 123,900 93,700 Inventories 192,600 214,800.

Copeland uses the indirect method to prepare its statement of cash fl ows. Copeland does not have any other current assets or current liabilities and did not enter into any investing or fi nancing activities during 2010.
Required 1. Prepare Copeland’s 2010 statement of cash fl ows.
2. Draft a brief memo to the president explaining why cash increased during such an unprofi table year.AppendixLO1